Friday 26 March 2021 9:58 am

Kaz Minerals boss raises take private bid to £4.1bn

The chief executive of FTSE 250 miner Kaz Minerals has raised his offer to take the firm private for a second time, it was announced this morning.

Oleg Novachuk, the joint owner of Nova Resources, has tabled a £4.1bn offer for the Kazakhstan-focused firm, up from a previous bid of £3.7bn.

Read more: Kaz Minerals owner tables £3.7bn bid to take miner private

Shares in the firm rose 2.8 per cent this morning.

The Kazakh businessman is trying to overcome shareholder opposition to the deal, which has already forced him to raise the offer once before.

Much of the opposition is understood to revolve around the firm’s Baimskaya development, which is believed to be one of the world’s most significant underdeveloped copper deposits.

Under the new deal, Nova will pay Kaz shareholders 850p per share, as well as a special dividend worth $0.27. The total deal is worth 869p per share.

That’s a 35.9 per cent premium on the original offer of 640p per share, and a 69.7 per cent increase on the miner’s closing price back in October, when the first bid was tabled.

In a statement today, Novachuk said: [Vladimir] Kim (other owner) and I are proud of the progress Kaz Minerals has made since its listing in 2005, during which time it has demonstrated strong governance and delivered significant shareholder returns.

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“However, Kaz Minerals must now focus on the execution of a higher risk, capital intensive strategy to deliver the Baimskaya project, the associated implementation risks of which are substantial.

“In this context, Kaz Minerals’ long term interests are best served as a private organisation”, he added. 

The board of Kaz had already recommended Novachuk’s previous offer, and did the same with this morning’s deal.

Deputy chair and senior independent director Michael Lynch-Bell said: The Independent Committee unanimously recommends that KAZ Minerals Shareholders accept this Final Increased Offer as we believe it reflects the long term fair value of KAZ Minerals, and strikes a fair balance between the strength of KAZ Minerals’ operating assets and development portfolio and the increased risk profile of the Baimskaya project.”

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Novachuk and Kim’s consortium controls about 40 per cent of the company’s stock, and this morning said it had received non-binding letters of intent from Samson Rock Capital and Alpine Associates Management to accept the offer. They own a combined 3.1 per cent of the firm’s shares.

Novachuk needs 75 per cent of shareholders to accept.