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. Last Updated: 07/27/2016

Hambro Plans Aricom Takeover

Peter Hambro Mining, the second-biggest gold producer in Russia, plans an all-stock takeover of Aricom worth as much as ?296 million ($428 million) after raising ?68 million in a share sale to cut debt.

Peter Hambro is in talks on a purchase priced at 15.77 to 17.14 Aricom shares for one of its shares. That would value Aricom at 23 to 25 pence per share based on closing prices Jan. 8, the day before discussions were disclosed, Peter Hambro said Thursday in a statement. The company slumped as much as 18 percent in London trading, while Aricom leapt 16 percent.

"The need for Peter Hambro to raise cash is a bit worrisome," said Tim Dudley, an analyst in London at Arbuthnot Securities with a "neutral" rating on the stock. "It shows that not all is going well in its development process."

Buying Aricom would boost London-based Peter Hambro's cash. Chairman and founder Peter Hambro, along with deputy chairman Pavel Maslovsky, lent the gold company $19.3 million in November. Aricom has $257 million in cash and Peter Hambro Mining $25 million, the statement said. Hambro is the deputy chairman of Aricom and Maslovsky the chairman.