X5 Retail Group, Russia's largest grocer, is studying the books of local hypermarket chain Karusel ahead of a possible takeover.

The London-listed retailer said this morning (16 January) that it had exercised an option to buy Karusel's owner, Netherlands-based Formata Holding.

"No less than 75% of the option price is payable in cash, while the remaining amount can be settled by newly issued X5 Retail Group shares," X5 said.