* Russian miner begins London trading slightly higher
* Blazes trail for fellow FTSE hopefuls Polyus, Evraz
* Placement was oversubscribed from on last day
By Julie Crust and Megan Davies
LONDON/MOSCOW, Oct 28 Shares of Polymetal
, one of three Russian miners seeking to
enter the prestigious FTSE 100 Index, started conditional
trading in London on Friday and had a flat start, after pricing
at the low end of a range.
The miner along with Polyus Gold and steel maker
Evraz are set to make history if -- as expected -- they
become the first Russian stocks to enter the blue chip index.
The introduction of the three Russian miners would further
increase the influence of resource stocks in the FTSE 100.
Polymetal, owned by tycoons Alexander Nesis and Alexander
Mamut with Czech investor PPF, is the first to start trading,
and the trio hope the new listings will broaden their
shareholder base and improve access to capital.
"It offers some confirmation to investors that the Russian
government is not generally against Russian companies being
included in the index," said Valentina Bogomolova, an analyst at
Uralsib Capital in Moscow.
"Polymetal is the first of the three companies... it is the
pioneer in some sense," she added.
Steelmaker Evraz , part-owned by Chelsea soccer club
owner Roman Abramovich, and Polyus Gold, part controlled by
tycoon Mikhail Prokhorov, have also filed for premium listings.
Polyus' plans were postponed when a committee chaired by
Russia's Prime Minister Vladimir Putin delayed a decision on
whether to approve the plans, leading some to question whether
politics had been a factor.
Polymetal's shares rose 3.4 percent to 9.51 above the offer
price at the start of conditional trading -- which refers to
trade ahead of official listing on the exchange. By the close of
trading, shares were close to their starting price of 9.22
pounds. Official trading in the shares begins on Nov.
"It is a positive sign ... a confirmation of the strong
intention to be included in the FTSE 100 and have a primary
listing and to provide the tender offer to remaining
minorities," said Bogomolova.
Shares had priced at 9.20 pounds on Thursday - near the
bottom end of the 9.10-10.35 pound price range previously
indicated by the company.
Still, a source close to the offer said it was 50 percent
oversubscribed on the range that they had set.
"There was huge demand on the last day," the person said.
"There was actually demand for about a billion dollars with
about $400 million coming in on the last day," the source said,
adding that it was helped by the timing of the euro zone deal.
Polymetal will have a market value of about 3.55 billion
pounds ($5.7 billion) which, combined with a free float of about
50.7 percent, will make it eligible for a spot in the top index.
Polymetal said in a statement on Friday it raised about
490.8 million pounds from its full London stock market listing
after setting a price at 9.20 pounds a share, confirming the
price reported by Reuters on Thursday.
Vitaly Nesis, Chief Executive Officer of Polymetal
International said in a statement it received an "excellent
response from existing shareholders as well as new investors".
RUSSIAN FTSE AIMS
While a total of 47 Russian companies have their shares
traded on London's main market, the vast majority are in the
form of global depositary receipts, effectively a certificate of
foreign ownership of a Russian domestic share.
Moving to a premium listing requires a significant free
float and more exacting standards of corporate governance, but
brings with it access to additional tracker funds which follow
Being a premium-listed company can also help a company
clinch deals or make it a more attractive takeover target.
Severstal dropped plans for an IPO of its Nord
Gold unit, Russia's second-largest gold miner, in February that
it hoped would raise up to $1.5 billion.
HSBC and Morgan Stanley are acting as joint sponsors to
Polymetal, Deutsche Bank, HSBC and Morgan Stanley are acting as
joint global co-ordinators and together with VTB Capital, as
joint bookrunners in relation to the Offer.
Collins Stewart acted as co-lead manager.