Liberum raises target price on Kaz Minerals following acquisition offer

Analyst Liberum hiked their target price on Kaz Minerals from 470.0p to 640.0p on Thursday after an all-in cash deal valued the group at £3.0bn.

Kaz Minerals accepted the acquisition offer from Nova Resources, a consortium owned by Chairman Oleg Novachuk and former chair Vladimir Kim, who already owned a combined 39% stake in the group.

Liberum highlighted that the 640.0p per share offer represented a 12% premium to Wednesday's closing price, meaning that it expects "a sufficient number of shareholders" to accept the offer, given the lack of viable alternatives to financing its "risky" Baimskaya project.

In terms of the rationale for going private, Liberum again pointed to Baimskaya, branding it a project that "does not align well with public market investors".

"Given the size of the project, which saw capex guidance rise from $5.5bn to $7.0bn this year, we agree that undertaking the project in private markets is probably the best option," said Liberum.

The broker, which also reiterated its 'hold' rating on the stock, stated that it now expects shares to trade on the bid going forward.