High River Gold Mines Ltd HRIVF

KazakhGold Group Plans to Acquire Polyus Gold

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https://www.bloomberg.com/news/2010-06-30/kazakhgold-group-says-it-proposed-acquiring-its-parent-company-polyus-gold.html
Interesting suggestion by a TROIKA (!) analyst...

Second Step
“The second step in this combination could be a subsequent equity-based merger of Polyus Gold with another global gold- mining company,’’ Mikhail Stiskin, a Moscow-based analyst at Troika Dialog, said June 21. “Polyus would use its U.K.- domiciled equity as a currency.”


KazakhGold Group Ltd. will take over its parent OAO Polyus Gold in a $9.4 billion deal, creating the largest producer of the metal among the former Soviet republics and helping the group seek acquisitions.
The combination under a single listing on the London Stock Exchange will provide “an attractive acquisition currency for future expansion and consolidation within the gold sector,” Jersey-registered KazakhGold said today in a statement.
The takeover would allow Polyus, Russia’s largest producer of the metal, to bypass a local law capping at 25 percent the shares of a company that can be held as depositary receipts, giving it access to more investors on global markets as it seeks to expandAUNWVEBWADUQ"></a>
KazakhGold agreed with billionaires Mikhail Prokhorov and Suleiman Kerimov, Polyus’s main shareholders, to acquire 74.3 percent of the company’s stock in exchange for its own shares, according to the statement. The company also struck an accord with Polyus subsidiary Jenington International Inc.
Deal Terms
The proposed terms call for 9.260 KazakhGold global depository receipts to be exchanged for each Polyus share, and 4.885 KazakhGold GDRs for each Polyus American depositary share. The ratios reflect a Polyus share value of about $48.25, every two Polyus ADSs at about $50.90 and each KazakhGold GDR at about $5.21, according to the statement. That values Polyus’s issued share capital at about $9.4 billion.
“This news is expected but still positive for the stock,” Valentina Bogomolova, a Moscow-based analyst at Nomura Holding Inc., said by phone.
KazakhGold said it would also start a $100 million equity capital raising of new shares and GDRs, delayed from last year. The shares and GDRs will be offered at $1.50 apiece and the proceeds used to repay a $50 million shareholder loan from Jenington.
KazakhGold and Polyus would together form the largest gold producer listed in London. They produced a total of 1.3 million ounces last year, almost double the current largest producer, African Barrick Gold Plc, which mined 716,000 so-called attributable ounces of gold.
Second Step
“The second step in this combination could be a subsequent equity-based merger of Polyus Gold with another global gold- mining company,’’ Mikhail Stiskin, a Moscow-based analyst at Troika Dialog, said June 21. “Polyus would use its U.K.- domiciled equity as a currency.”
Ivanov said the company may also look at a secondary listing in North America or Hong Kong.
‘‘I would not exclude that further on we would look for a secondary listing in other places, but London is a must for us.’’ he said.