Rusal rejects Norilsk’s buy-back offer

UC Rusal says it does not intend to sell its 25% stake in OJSC Norilsk Nickel back to the company despite being offered an above market valuation US$12 billion for the equity.

Norilsk made the offer this week in a bid, it said, to end an impasse between its two largest investors; Rusal and Interros Holding Co (which also owns a quarter of the company).

In a statement the company said its offer, at a premium to the current share price, "testifies the credibility of its intentions and the desire to resolve the current situation in the interests of all shareholders".

Rusal replied, almost immediately, saying the stake was "strategic", and that it had "no intention" of selling. Rusal added "Norilsk Nickel should be distributing excess cash to all shareholders, instead of making offers to use this cash to buy back 25% shares for the benefit of only one shareholder".

A group of banks, including JP Morgan and Morgan Stanley, have expressed an "interest and readiness to co-finance the acquisition", according to Norilsk.

The company says an analysis of institutional investors and shareholder opinion showed the proposed acquisition to be the "most efficient" course of events.

The offered price is set at a premium to the market price immediately prior to the deal, and, according to Norilsk, "considerably exceeds the acquisition price Rusal paid for the stake in the company in 2008".

In October, Rusal turned down a US$9 billion offer from Interros's billionaire owner Vladimir Potanin. This followed a squabble over board control and differing opinions on company strategy, which remains unresolved.