bne IntelliNews -

Billionaire businessman Suleiman Kerimov, the main shareholder of Russia's largest gold miner and producer Polyus Gold, and his son Said plan to buy out 59.8% of its shares from minority holders and take over the company. Sacturino Limited, owned by Said Kerimov, will offer $2.97 per share. 

Suleiman Kerimov now holds a 40.2% stake in Polyus Gold. The company's other shareholders are Gavril Yushvaev (19.3%), Oleg Mkrtchan (18.5%), Chengdong Investment Corporation (5%) and VTB (3.7%). The free float is 13.4%.
If the offer is made and supported by all shareholders, Said Kerimov will have to spend $5.39bn on the buyout. The entire company is valued at $9bn, while its capitalisation on the London Stock Exchange (LSE) is $8.7bn. 

Such a hefty valuation could be explained by Kerimov's intention to use the deal price as an indicator in future transactions, such as the full or partial sale of the company to strategic investors, Sberbank CIB analysts said in a note.

"The liquidity of Polyus Gold shares has been low for quite some time now, and the potential buyout of the company was widely expected," the note said. Polyus Gold shares went up by 4% on the LSE during September 2 trading.

Sacturino will have to formally make the offer or announce its withdrawal by September 30. Polyus Gold's management will have to make recommendations to shareholders within one to two months after the offer is placed.

The company posted IFRS net loss of $182mn in 2014 compared with $143mn net profit reported for 2013. The loss was attributed to significant write-offs on investment and financial instruments, as well as currency losses. Adjusted net profit adjusted for non-cash write-offs increased by 9% y/y to $615mn.

Sberbank CIB estimates Polyus Gold's 2015 Ebitda at around $1bn-1.1bn. The offer may thus imply a 2015 EV/Ebitda of roughly 8.5-9, depending on the net result of both FX and gold hedging derivatives transactions, which have yet to expire and be settled, the analysts said.