Bloomberg News

Polyus Still Intends to Buy KazakhGold Stake After Stock Slump

October 17, 2008

OAO Polyus Gold, Russia's largest producer of the metal, said it still plans to buy half of KazakhGold Group Ltd., whose shares have halved since deal was announced.

Polyus ``hasn't changed its mind'' on the purchase of 50 percent of KazakhGold, Polyus Chief Executive Evgeny Ivanov said yesterday in an e-mail in response to questions. He declined to comment whether the terms of the deal may be amended.

Moscow-based Polyus Sept. 29 offered $7.95 in cash and 0.298 of a Polyus share for each KazakhGold share it intended to buy. That valued KazakhGold shares at $15.63, based on closing stock prices on Sept 26, the last trading day before the bid was revealed. Polyus has dropped 30 percent since then and was at 476 rubles as of 11:52 a.m. in Moscow trading.

KazakhGold depositary receipts, each equivalent to one share of the company, fell 39 cents, or 7.6 percent, to $4.75 in London. They have declined 60 percent since Sept. 26.

To contact the reporter on this story: Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net.

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net.


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