Tycoon Kerimov to take Russia's largest gold producer Polyus private

By bne IntelliNews November 4, 2015

Minority shareholders of Russia's largest gold producer Polyus Gold have agreed to sell a 59% stake in the company to billionaire Suleiman Kerimov, who plans to delist Polyus and take the company private, Bloomberg reported on November 4.

Currently the Kerimov family holds 40% in Polyus and will be able to increase the stake to over 98%, the agency reports, citing a regulatory claim filed by Sacturino Ltd controlled by Suleiman's son Said.

Polyus reportedly intends to delist its shares from the London Stock Exchange on December 3. The company has been considering following the Kremlin's exhortation for large corporates to return to Russia after it took its primary listing to London in 2012.

Sacturino will buy Polyus shares at $2.97, valuing the gold miner at $9bn, according to earlier reports.

Previously, the Kerimovs said that co-owners of the company Gavriil Yushvaev and Oleg Mkrtchan agreed to sell their stakes totalling some 40%, suggesting that another 18% will be acquired from other minority owners.

An independent committee set up by Polyus had said that the offer "materially" undervalued the company, although an improved or an alternative offer is not expected.

In September, Sberbank CIB estimated Polyus Gold's 2015 Ebitda at around $1bn-$1.1bn. The offer made by the Kerimovs therefore 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.

Polyus Gold - KEY METRICS
  2014 2015E 2016E 2017E
Financials, $ mln      
Revenues 2,239 2,232 2,536 2,900
EBITDA 1,011 981 1,027 1,155  
EBITDA margin 45% 44% 40% 40%
Net income -181 536 560 641
EPS (adj), $ 0.16 0.18 0.18 0.21
Div/share, $ 0.16 0.05 0.06 0.06
Valuation, Gearing and Yield    
EV/EBITDA 9 9.2 8.6 7.4
P/E 17.7 16.4 15.7 13.7
P/CF 10.9 10.5 12.2 9.5
Net debt/EBITDA 0.3 0.2 0.1 neg
Dividend yield 5.70% 1.80% 1.90% 2.20%
Revenues -4% 0% 14% 14%
EBITDA 11% -3% 5% 13%
EPS (adj) -4% 8% 4% 15%
Sector Valuation      
EV/EBITDA 6.5 6.2 6.2 5.5
P/E 19 22.7 n/m n/m
P/CF 7.2 2.6 3.1 3
Sector Growth      
Revenues -7% -4% 4% 8%
EBITDA 10% -1% -2% 9%
EPS -11% 54% -6%  
Main Shareholders      
Nafta Moskva (Suleiman Kerimov) 40.20%      
Gavriil Yushvaev 19.30%      
Oleg Mkrtchan 18.50%      
CIC/Chengdong 5.00%      
VTB 3.70%      
Other 13.30%      



Polyus Gold 1H15 IFRS results, $ mln
  1H14 2h14 1H15 H-o-H y-o-y 1H15E A/E 1H15C A/C
Revenues 1,007 1,232 1,019 -17% 1% 1,004 1% 1,020 0%
EBITDA, adjusted 393 620 589 -5% 50% 580 2% 574 3%
EBITDA margin, adjusted 39% 50% 58% 8 pp 19 pp 58% 0 pp 56% 2 pp
Net income, adjusted 207 290 294 1% 42% 315 -7% 372 -21%
Net income margin, adjusted 21% 24% 29% 5 pp 8 pp 31% -2 pp 36% -7 pp
C - Consensus assembled by Interfax, adjusted for outliers          
Source: Company, Sberbank CIB Investment Research          

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