Roman Abramovich, the billionaire owner of Chelsea Football club and other investors have agreed to sell 40% of a stake in Russian gold mining firm, Highland Gold Mining for $1.4 billion to Fortiana Holdings Ltd.
It was also reported that Fortiana would offer the other existing shareholders of the firm the same offer of $3.94 per share at a 3.8% premium of the shareprice.
READ ALSO: Ighalo to earn N1.4 billion in six months at Manchester UnitedÂ
Backstory: This comes at a period of rallying gold prices as Nairametrics reported earlier that gold prices surged over $1,800 per ounce for the first time since 2011, as the year to date inflows into bullion-backed exchange-traded funds (ETF) have topped the record full-year total, which was set in 2009.
Gold prices also set a record of $2000 per ounce before dropping to just above $1900 earlier this week
The gold rally has made gold mining firms attractive for further M&A activity, as Fortiana Holdings, owned by Russian businessman, Vladislav Sviblov looks to enter fully into space with other firms eyeing up smaller gold mergers around the world.
READ ALSO: Nigerian entrepreneur becomes first African woman to own a European club
Highland Mining directors have been urged by Citigroup to accept the offer as Fortiana says the deal would be financed through a loan from VTB Bank. Highland Mining firm as also risen with the gold rally as the stock price is up 47% year to date.
What this means: With the gold rally and economic uncertainty due to the global depressions caused by the pandemic, more gold mining firms are expected to be scooped up in M&A deals. For Chelsea fans, this could see the club having more funds for player transfers especially for a goalkeeper, as UEFA relaxed FFP regulations for clubs to afford players during the pandemic. Chelsea bought winger Ziyech from Ajax for a €40 million fee and also bought German Striker, Timow Werner for a €53 million fee from RB Leipzig.
