http://www.mineweb.com/mineweb/view/mineweb/en/...99699&sn=DetailMOSCOW (Reuters) -
Russian steelmaker Severstal (CHMF.MM:Quote, Profile, Research) said it will bid for a majority stake in Oslo and Toronto-listed Crew Gold (CRUr.OL: Quote, Profile, Research)(CRU.TO:Quote, Profile, Research), which some analyst say could be floated as a separate unit later this year.
The Russian steel and mining group said on Thursday it had raised its stake in Crew Gold to 26.6 percent by acquiring an additional 145.3 million shares in the company, and will offer 1.10 Norwegian crowns per share for the rest.
"At the moment I think they are trying to strengthen their position in gold," Uralsib analyst Dmitry Smolin said. "Crew Gold could add up to 33 percent to their current production."
The offer values Crew Gold, which has mining and exploration projects in Guinea, west Africa, at about $400 million.
Deutsche Bank analyst Olga Okuneva noted that the Toronto and Oslo-listed company also has about $319 million of debt.
"We calculate that Severstal will need around $290 million to buy out the remaining 73.4 percent stake in Crew Gold," she wrote in a note.
Severstal said it will provide more details on the formal offer within two weeks.
"We are required to make this offer under Canadian law, as we have exceeded the 20 percent threshold," Nikolai Zelenski, CEO of Severstal Gold, told Reuters. He said the offer is twice Crew Gold's share price at the start of the year.
While a full takeover will add to Severstal's $7.9 billion debt pile, analysts said the acquisition could make the company's gold mining business more attractive to investors should it proceed with plans to spin off and list the unit.
Severstal said in 2007 it could list, sell or continue to hold its gold business, although its representative said on Thursday the company is not currently preparing for an initial public offering of its gold business. (Editing by David Holmes) ($1=5.983 Norwegian Crown)