Polyus Gold cancels share sale

Russia's biggest gold producer cited poor market conditions as the reason for the decision; market sources say the group failed to collect enough bids from investors.

MOSCOW (Reuters) - 

Polyus Gold (PLZL.MM: Quote), Russia's top gold miner, said on Friday its two main owners had decided not to sell a 5% stake in the company "due to market conditions".

Earlier a market source told Reuters that the sale had been cancelled after failing to collect enough bids from investors.

"The deal did not take place because of a weak market and very aggressive pricing. There was demand for around $400 million but they were aiming for roughly $530 million," the source said, on condition of anonymity.

"The shareholders did not want to sell less than 5%."

On Thursday, Polyus said its main shareholders, Mikhail Prokhorov and Suleiman Kerimov, were prepared to sell up to a total of 5% of the company in the form of shares and/or American depositary receipts.

Banking sources told Reuters on Monday Prokhorov and Kerimov could sell up to 10 percent of Polyus's shares between them after the company's shares more than doubled in value since the start of the year.

Polyus shares -- which fell earlier in the week on news of the planned sale -- were up 3.3 percent to 1,677 roubles by 0915 GMT, outperforming gains of 0.85% on the broad MICEX index .MCX. (Reporting by Olga Popova; Writing by Toni Vorobyova and Aleksandras Budrys) ($1 = 28.71 roubles)

© Thomson Reuters 2009 All rights reserved

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