Metals News
UPDATE 1-Norilsk Offers to Buy RUSAL Stake for $12 Bln
industry news
Dec 17,2010

MOSCOW, Dec 16 (Reuters) - Russian metals group Norilsk Nickel (GMKN.MM: Quote) said on Thursday it had offered UC RUSAL (0486.HK: Quote), the world's top aluminium producer, $12 billion for its 25 percent stake in Norilsk.

"The offer price is set with the premium to the market and, according to the company's information, considerably exceeds the acquisition price UC RUSAL paid for the stake in the company in 2008," Norilsk said.

UC RUSAL, majority owned by tycoon Oleg Deripaska, said the stake was not for sale.

"For RUSAL an investment in Norilsk Nickel is a strategic one and we do not intend to sell our stake," it said.

Norilsk said its offer followed a review in consultation with JP Morgan, Morgan Stanley, Goldman Sachs, Societe Generale, UBS, Deutsche Bank, HSBC and other banks.

Norilsk said the banks were ready to co-finance the acquisition of the stake.

The deal could help Norilsk to reduce debt, it said, and allow the company to return to a dividend policy of 20-25 percent of net profit. In May, the board of Norilsk had recommended a 50 percent dividend for its 2009 financial year.

It would also enable the firm to focus on strategy, to implement investment and production programmes and to comply with social obligations to workers and the regions where it operates, its statement said.

The stake sale would also increase the number of independent directors on Norilsk's board so that they would make up the majority, it said.

UC RUSAL and Interros, an investment vehicle of tycoon Vladimir Potanin, which also holds a large stake in Norilsk, are at odds over the management of the group.

Interros has four seats on the Norilsk board, while RUSAL has three. The company management controls four seats and three seats are held by independent directors.

Norilsk Nickel
United Company Rusal
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