Bloomberg News

Polyus Falls as Report of Stake Sale Implies Shares Overvalued

March 03, 2009

OAO Polyus Gold dropped the most of any stock in Russia’s Micex Index (INDEXCF) after a report about a stake sale indicated the company may be overvalued.

Billionaire Vladimir Potanin sold 20 percent to Polyus to billionaire Suleiman Kerimov for $680 million to $740 million, Vedomosti reported, citing three unidentified people familiar with the situation.

The value of that one-fifth stake means Russia’s biggest gold producer would be worth between $3.4 billion and $3.7 billion, or up to 53 percent less than Polyus Gold’s stock- market value of 233.6 billion rubles ($6.4 billion) as of yesterday.

“The indicative value is about 50 percent below the current market price,” UralSib Financial Corp. head of equity research Michael Kavanagh wrote in an e-mail message.

Polyus dropped 7.2 percent to 1,137.60 rubles, the biggest decline in more than two weeks, compared with a fall of 0.1 percent for the 30-stock Micex at 3:42 p.m. in Moscow.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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