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* Mutsoyev, Yushvayev looking to buy out Prokhorov
* $4 bln deal now before UK Takeover Panel
* Report fuels speculation of all-Russian gold merger
* Kerimov supports deal, flush with cash - sources
By Polina Devitt and Megan Davies
MOSCOW, Jan 29 (Reuters) - Two Russian billionaires have been shortlisted to buy a stake in Polyus Gold, sources said, in a deal which could pave the way for a merger with rival Polymetal to create a national gold mining champion.
Sources close to the matter said retail boss Zelimkhan Mutsoyev and fruit juice magnate Gavriil Yushvayev wanted to buy tycoon-turned-politician Mikhail Prokhorov's $4 billion stake in London-listed Polyus Gold International Ltd.
The proposed deal has gone before the UK Takeover Panel, which is evaluating whether the proposed buyers of the 38 percent stake are acting independently or form a "concert party" that would control more than 30 percent of Polyus, a level that would force a mandatory offer to buy out minorities.
Also under scrutiny is the buyers' relationship to tycoon Suleiman Kerimov, who owns 40 percent of Polyus - Russia's top gold miner.
If approval is forthcoming, the deal could be done in the first quarter, sources said, describing the review as a delicate process with an uncertain outcome.
"It's not approved, not final," one source familiar with the process said on Tuesday. A second added: "It all looks quite suspect to the regulator - that's why everything is (coming out) as it is."
Sources say Kerimov, one of Russia's class of powerful business 'oligarchs' who enjoys good relations with the Kremlin, sees the deal as a springboard to building a national champion by merging Polyus with Polymetal International Plc.
He is flush with cash after raising $3 billion from the sale to a Chinese sovereign wealth fund of bonds convertible into shares in Uralkali, which became the world's No. 1 potash producer in a 2011 merger he masterminded, they note.
"I think Kerimov has in mind creating the largest gold company in the world ... like Uralkali is the largest fertiliser company," said Andrey Tretelnikov, an analyst at Rye, Man and Gor in Moscow.
An all-Russian merger would secure control over 77 tonnes a year of gold output, shoring up the country's financial security amid concern that indebted nations are waging "currency wars" that will debase the value of paper investments.
That output would be enough to cover annual gold buying by Russia's central bank, which holds the world's fourth-largest gold and forex reserves. Its nearly 1,000 tonnes of bullion is worth 10 percent of its half-trillion-dollar hoard.
Industry watchers say, however, that gold mergers have a history of failing to create value. There are no obvious operational synergies between Polyus and Polymetal, whose main producing assets are thousands of miles apart.
Shares in both companies have rallied in London since news last week that British regulators were reviewing the sale of Prokhorov's stake. Polyus was valued at $10.6 billion at the close of trading on Monday, and Polymetal at $6.8 billion.
Kerimov, a 46-year-old native of the North Caucasus republic of Dagestan, has ploughed some of his $6.5 billion fortune back into his home region as owner of soccer club Anzhi Makhachkala.
Prokhorov, owner of the U.S. Brooklyn Nets pro basketball team, placed third behind Vladimir Putin in last year's presidential election and is seeking to scale back his business interests as he focuses on politics.
His exit would drive a final nail into the coffin of hopes that Polyus might do an international merger.
No comment was available either from Prokhorov's investment holding Onexim or from Kerimov's vehicle Nafta Moskva.
Kerimov has a track record of bringing in Russian "minigarchs" to help execute deals without falling foul of takeover rules, and the proposed Polyus deal fits that pattern.
Mutsoyev is a 53-year-old lawmaker for the ruling United Russia party who started out after school as a dump truck driver before going into business in the 1980s and building a fortune estimated by Forbes magazine at $1.5 billion.
Mutsoyev's family controls the Regions Group of shopping centres and he joined Kerimov as a co-investor in the $24 billion merger that created Uralkali in 2011.
Yushvayev, 55, is a former co-owner of juice and dairy firm Wimm-Bill-Dann, now part of PepsiCo, whose net worth has been estimated at $1.2 billion. Neither could immediately be reached for comment.
Another of Kerimov's co-investors in Uralkali is Alexander Nesis, who is also a shareholder in Polymetal. That connection has stoked speculation of an eventual Polyus-Polymetal merger.
Shareholder sources at Polymetal have however played down talk of a tie-up, arguing Polyus is over-valued and has a history of poor operational management of its Siberian gold projects.
Polyus produced a record 1.68 million troy ounces of gold last year and has forecast output growth of up to 7 percent or between 1.7 and 1.8 million tonnes this year.
Polymetal has forecast gold output this year of 760,000 to 800,000 ounces. Including its silver and copper output, Polymetal has forecast its total production at 1.2 million troy ounces of gold equivalent.