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Polymetal CEO: No Merger Discussions Being Held With Polyus Gold International

01/30/2013 | 05:03am US/Eastern

By Lukas I. Alpert

MOSCOW--Russian gold and silver producer Polymetal International PLC's (>> Polymetal International PLC) chief executive said Wednesday that his company hasn't been in talks with rival Polyus Gold International (>> Polyus Gold International Ltd) over a possible merger.

"We are not in any type of discussion with that company," Vitaly Nesis told Dow Jones Newswires, dismissing speculation about the two companies coming together as "market rumor."

Negotiations over the sale of metals magnate Mikhail Prokhorov's 37.8% stake in Polyus to two parties have been ongoing since September and is currently being reviewed by the U.K.'s takeover panel.

Russian business daily Vedomosti on Tuesday identified the two possible bidders as real estate baron Zelimkhan Mutsoyev and Gavril Yushvaev, the former co-owner of Russian juice maker Wimm-Bill-Dann, which was sold to PepsiCo Inc. (>> PepsiCo, Inc.) in 2010.

Since Mr. Prokhorov's holding company Onexim first said it was in talks last year, speculation has focused on his co-owner in Polyus, Suleiman Kerimov, who owns 40.2% of the company's stock, as being involved, which his company, Nafta Moskva has denied.

A person familiar with the negotiations told Dow Jones Newswires that the talks involve Mr. Kerimov and a consortium of business partners who would all buy small stakes in Polyus, thereby avoiding one shareholder passing the ownership threshold that would trigger a requirement to offer buyouts to minority partners.

Mr. Mutsoyev, worth $1.5 billion according to Forbes, is a partner with Mr. Kerimov in potash giant Uralkali (>> Uralkaliy OAO).

Numerous analysts have suggested that a sale to parties close to Mr. Kerimov would pave the way for Polyus to merge with Polymetal, which had once been owned by Mr. Kerimov and is now partly held by his long-time business partner Alexander Nesis and others.

Write to Lukas I. Alpert at lukas.alpert@dowjones.com

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