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Prokhorov sells Polyus Gold stake

by Paul Whitfield  |  Published February 22, 2013 at 9:19 AM
gold101211.gifRussian billionaire Mikhail Prokhorov sold his 37.8% stake in Polyus Gold International Ltd. to two billionaire compatriots for $3.62 billion, dashing the immediate hopes of a merger with Polymetal International plc.

Shares in Polyus leaped more than 10% in late January after it emerged that Prokhorov's Onexim Holdings Ltd. was in talks with unnamed parties, leading analysts to suggest that a deal with fellow London-listed Polymetal could be imminent.

That deal, which would have created the world's No.5 gold producer, no longer appears imminent after Onexim said Friday, Feb. 22, that it had sold an 18.5% stake to Zelimkhan Mutsoyev's holding company Lizarazu Ltd. for $1.77 billion and 19.28% to Gavriil Yushvayev's Recez Ltd. for $1.85 billion.

Analysts said that the sale was still a positive outcome for Polyus as the new shareholders are likely to re-orient the company by demanding higher dividends and could yet prove an intermediary step to a deal with Polymetal.

The sales were struck at a discount to Polyus' market capitalization on Friday of £6.69 billion ($10.19 billion), which translates to a value of $1.88 billion for Mutsoyev's 18.5% stake and $1.96 billion for Yushvayev's 19.28% holding.

Onexim announced the sale on Friday after the UK's Takeover Panel ruled that the two Russian buyers were not acting in concert together or with Polyus's 40.2% shareholder Suleiman Kerimov. A ruling that they had been working together would have triggered a mandatory takeover for Polyus remaining shares and likely ended the deal.

Prokhorov, who is best known in the US as the owner of basketball franchise the Brooklyn Nets, is seeking to diversify his investments away from commodities and sell businesses to focus on his political aspirations. He ran for President against Vladimir Putin in 2012. Onexim, in November, agreed to buy the 50% it didn't already own of Russian Brokerage Renaissance Capital for an undisclosed fee.

Polyus gold takes financial advice from JPMorgan Cazenove.

Shares in Polyus Gold traded Friday at 222.75 pence, up 3.75 pence or 1.7% on their Thursday close. Shares in Polymetal traded at 970 pence, up 24 pence or 2.5%.

Tags: Brooklyn Nets | Gavriil Yushvayev | JPMorgan Cazenove | Lizarazu Ltd. | Mikhail Prokhorov | Onexim Holdings Ltd. | Polymetal International plc | Polyus Gold International Ltd. | Recez Ltd. | Suleiman Kerimov | Vladimir Putin | Zelimkhan Mutsoyev

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