Fosun mulls takeover of $1b GV Gold

Bloomberg

A consortium led by Fosun International Ltd is in talks to acquire a majority stake in GV Gold PJSC, a Russian gold miner backed by BlackRock Inc, according to people familiar with the matter.
Fosun is considering teaming up with partners including Zhaojin Mining Industry Co for a joint offer, the people said, asking not to be identified as the information isn’t public. A deal could value GV Gold at about $1 billion, they said.
GV Gold, controlled by the owners of Moscow-based Lanta-Bank, mines at several Siberian deposits and has almost doubled output since 2016 to 304,000 troy ounces last year. BlackRock owns about 18 percent of the gold miner after a 2007 deal that valued the company at $500 million.
The miner’s initial public offering plan was stalled last year amid international sanctions and slump in commodity prices. Even as GV Gold and its owners were not targeted, the value of all Russian assets went down following the US penalties.
The talks come at a time gold prices have surged past $1,400 an ounce for the first time since 2013 after US. Federal Reserve indicated a readiness to cut interest rates and a military strike between the US and Iran.
Citigroup Inc said that the enthusiasm for bullion is justified, with $1,500 to $1,600 in the next 12 months under a bullish-case scenario.
No final decision has been made and there’s no certainty the talks will lead to an agreement, according to the people. Representatives for Fosun, Zhaojin and GV Gold declined to comment.
The talks with GV Gold, also known as Vysochaishy, would be Fosun’s second attempt to acquire a stake in a Russian gold miner.
A group of investors led by the Shanghai-based company agreed to buy 10 percent of Polyus PJSC for almost $900 million in 2017, but the deal collapsed early last year after they failed to agree on a way forward to wrap up the transaction amid pending approvals from Chinese authorities.