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. Last Updated: 07/27/2016

Polyus Will Likely Go to Prokhorov

Itar-TassWorkers pouring a gold ingot at a Polyus plant in the Krasnoyarsk region. Prokhorov may get 51 percent of the firm.
Mikhail Prokhorov is likely to buy his business partner Vladimir Potanin's 25.5 percent stake in Polyus Gold, giving him a controlling stake of 51 percent in the country's largest gold producer, Vedomosti reported Thursday, citing sources close to the company.

A spokeswoman for Polyus Gold said she could not confirm the report.

The report comes amid speculation about the split of the Interros group between former CEO Prokhorov and Potanin. Such a move is widely expected, analysts said.

It would be a logical move for Potanin to raise cash for the $7.5 billion or more required to buy Prokhorov's 27 percent blocking share in Norilsk Nickel, said Sergei Donskoi, an analyst at Troika Dialog.

Although such a deal might not have been reached yet, they are probably working on it, said Vladimir Zhukov, metals and mining analyst at Alfa Bank.

Potanin "would be looking for some asset swaps," Zhukov said.

Potanin's share in Polyus would earn him some $2.5 billion, Zhukov said.

Interros' energy assets will probably likewise go to Prokhorov, analysts said.

Polyus Gold, which was spun off from Norilsk's gold assets in 2006, has an estimated value of $10 billion. The largest Interros asset after Norilsk Nickel, Polyus produced 37.8 tons of gold in 2006.

If Prokhorov were to end up acquiring Potanin's stake, this would not be likely to have a big effect on Polyus shares, MDM Bank said in a note to investors.

Polyus shares were down 2.5 percent to $51.20 on Thursday.