Polymetal Drops Most Since 2014 as Shareholders Cut Stakes

  • PPF Group and Juri Smejc sold 6% stake for 975 pence a share
  • Sale was at 7.9% discount to Thursday’s closing price

Polymetal International Plc dropped the most in 2 1/2 years after two major investors sold a combined stake of about 6 percent in the Russian gold producer.

The company slid as much as 9.5 percent to the lowest since June 28 in London. PPF Group NV, an investment group with Czech co-owners, and Jiri Smejc sold 26 million shares at 975 pence in an accelerated book building, Morgan Stanley, which organized the deal, said in a filing Friday.

The sale was at a 7.9 percent discount to the closing share price on Thursday. Through yesterday, Polymetal advanced more than 80 percent this year as gold prices gained amid loose monetary policies by central banks around the world. PPF and Smejc probably decided to sell shares to lock in profits, and it may signal to other investors that they don’t expect the stock to rally much further, according to Oleg Petropavlovskiy, an analyst at BCS Global Markets.

"The real discount wasn’t that large for such a sale, which is success" for the sellers, Petropavlovskiy said by phone from Moscow. He cut his recommendation on Polymetal to sell after an announcement yesterday about the book building.

Zuzana Migdalova, a spokeswoman for PPF, declined to comment. Smejc is the chairman and co-owner of Home Credit B.V., which is almost 90 percent controlled by PPF.

The shares were down 7.8 percent at 976.5 pence by 2:24 p.m. in London, valuing the company at $5.4 billion.

Following the deal, PPF will hold 12.9 percent of the gold miner, while Smejc will own a 1.5 percent stake, according to the statement.

ICT Holding Ltd., controlled by billionaire Alexander Nesis and his partners, submitted an indication of interest to participate in the placing, Morgan Stanley said on Thursday. ICT has been a long-term shareholder in Polymetal.

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