There’s gold for winners of battle at Russian miner

THE ruckus at London’s top five gold producer, Petropavlovsk takes a second to get your head around, but it’s worth the effort.

At its heart is a cheeky attempt by a Russian gold magnate to seize control of a £1 billion company without lodging a full takeover at the premium price that other shareholders deserve.

It’s not the first time this business, founded by Peter Hambro, has been in such trouble.

The problem is, the company has a 22% block of shares that has been passed from one oligarch to another over the years, each time bringing various degrees of discord. The latest billionaire to own it wants to kick off the board and put in his own placemen.

Once again, other shareholders are suffering from Petropav’s “civil war discount”. Just at the time when the stock should be racing away with the gold price.

The chaos the Russians are currently causing is clearly being done in the hope of persuading smaller investors to sell up so they get even more control.

But, this time, for once, there’s a good chance they’ll fail.

Why? Because for the first time, a rival major shareholder can offset the power of that 22% block. Fittingly called Prosperity, the fund manager has built up a 20% position to balance out the power.

Having invested heavily in new plant, Petropav should be a great investment.

Minority investors should stay in, vote with Prosperity against the Russian raiders and work on a way to break down that 22% poison pill.

There’s gold in them thar shares. It’s just a question of getting the power base right.