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UPDATE 1-Polyus to buy 50.1 pct of KazakhGold for $269 mln

Fri Jun 12, 2009 1:50pm EDT

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* Polyus to buy 50.1 pct stake for about $269 million

* Value of offer below original offer value

(Adds details)

LONDON, June 12 (Reuters) - Top Russian gold miner Polyus Gold PLZq.L<PLZL.MM said on Friday it agreed to buy 50.1 percent of KazakhGold Group Ltd (KZGq.L) in a cash and share deal for about $269 million.

The value of the offer is below the partial one made last December, but later retracted, which valued a 50.1 percent stake in KazakhGold at $308 million.

"KazakhGold's production levels and working capital levels have deteriorated substantially more rapidly than previously anticipated, and KazakhGold requires an immediate funding commitment in order to continue to operate as a going concern," it said.

Under the terms of a partial offer and a buyback, KazakhGold shareholders will be entitled to receive $7.18 in cash and 0.064 Polyus Gold shares.

(Reporting by Julie Crust; editing by Ben Deighton)



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