Roman Abramovich Sells Out in $1.4 Billion Gold Deal

Billionaire Roman Abramovich agreed to sell his stake in a Russia-focused gold miner, the latest in a wave of precious-metal deals, as bullion trades at a record high.

Abramovich and other investors holding about 40% of Highland Gold Mining Ltd. agreed to sell their shares to Fortiana Holdings Ltd. in a deal valuing the miner at about $1.4 billion. Fortiana will make an offer to the rest of Highland’s shareholders at the same price of 3-pounds-per-share ($3.94), a 3.8% premium to Thursday’s closing price.

Highland Gold operates several mines in Russia and plans to produce about 300,000 ounces of gold this year. The recommended offer from Fortiana, owned by Russian entrepreneur Vladislav Sviblov, follows a string of other gold transactions this year as smaller and mid-tier companies respond to a surge in prices and reposition themselves following recent mega-deals by the two biggest producers.

The deal comes roughly a month after Fortiana sold a stake of about 5% in another Russian gold miner, Petropavlovsk Plc, which is in the middle of a boardroom battle. Selling that interest gave the company cash to pursue other investment opportunities, it said at the time. Sviblov is also an executive and majority shareholder of a company developing a zinc-lead project in eastern Siberia.

Highland Gold rose 3.5% to 299.2 pence at 9:20 a.m. in London. The shares had gained 47% this year through Thursday, buoyed by gold’s surge to a record this month.

The company’s independent directors are being advised by Citigroup Inc. and have recommended shareholders accept the Fortiana offer. The buyer said it plans to finance the purchase using a loan from Russia’s VTB Bank PJSC.

— With assistance by Mark Burton, and Yuliya Fedorinova

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