It was reported on May 6 that the Kazimir Partners investment fund had submitted a proposal to Jenington International, of the Polyus Gold group, to buy 2.5% in Polyus Gold at USD 350 mn. The offered price means a 16.5% premium to the current market price of the share package, and corresponds to USD 73 per common share.
In 2006, Jenington International bought a 9% share in Polyus Gold at a price of around USD 1 bn. By Russian law, the shares bought are not regarded as treasury stock, meaning that Polyus Gold is not obliged either sell or redeem these shares. In November 2007, German Pikhoya, Polyus general director for strategy and corporate development, indicated that the company might use the share package as an instrument for acquisition of assets or to finance its investment activities.
We believe the news may produce a positive effect on Polyus Gold shares, as the offer price exceeds the free market price of the shares by 16.5%.
0.569
0.073
