No­rilsk jumps to 2-year high as buy­back of­fer tops mar­ket price

The Pak Banker - - Company& -

MOSCOW: OAO GMK No­rilsk Nickel, Rus­sia's biggest min­ing com­pany, jumped to a two-year high in Moscow trad­ing af­ter of­fer­ing to buy back shares at $25 more than the mar­ket price.

No­rilsk surged 3.5 per­cent to $227 on the RTS in­dex as of 12:52 p.m. lo­cal time, the high­est in­tra­day price since Aug. 5, 2008. The shares climbed as much as 4.8 per­cent to 7,126.98 rubles on Moscow's Micex ex­change, the high­est since May 2008.

The com­pany's de­ci­sion to re­pur­chase stock fol­lows its failed bid to buy back a 25 per­cent stake held by United Co. Rusal for $12 bil­lion. Rusal's bil­lion­aire founder, Oleg Deri­paska, has been locked in a dis­pute with fel­low No­rilsk share­holder Vladimir Potanin since 2008, and has re­buffed two pro­pos­als since Oc­to­ber to sell out of the nickel com­pany.

"The fail­ure of the talks is a clear neg­a­tive for Rusal; we be­lieve that dis­posal of the stake could have been strongly ad­van­ta­geous for the com­pany," Mikhail Stiskin, a Moscow-based an­a­lyst at Troika Dia­log, said in a note. "A po­ten­tial buy­back could sup­port No­rilsk Nickel's share price in the short term."

From 5 p.m. in Moscow to­day, No­rilsk will buy back as many as 11.9 mil­lion shares at $252 apiece, to­tal­ing about $3 bil­lion, ac­cord­ing to an emailed state­ment. The buy­back in­cludes Amer­i­can de­posi­tary shares at $25.20 a share.

The Moscow-based com­pany of­fered to pur­chase $3 bil­lion of stock in a pub­lic ten­der by Jan. 21, and $1.5 bil­lion over the year from the mar­ket, No­rilsk Pres­i­dent An­drei Klishas told re­porters to­day in the Rus­sian cap­i­tal.

Rusal had wanted $16 bil­lion for its stake and No­rilsk was ready to pay no more than $14 bil­lion, In­ter­fax re­ported late yes­ter­day, cit­ing peo­ple it didn't iden­tify. Maria Uvarova, a spokes­woman for No­rilsk in Moscow, de­clined to com­ment.

In Oc­to­ber, Rusal re­jected a $9 bil­lion of­fer for its stake from Potanin, who also owns 25 per­cent of No­rilsk, as the share­hold­ers bick­ered over com­pany strat­egy.

Rusal re­it­er­ated its in­ten­tion not to sell its No­rilsk stake to­day, say­ing the share­hold­ing is "strate­gic," ac­cord­ing to an e-mailed state­ment. At Rusal's request, No­rilsk will hold a share­hold­ers' meet­ing on March 11 to elect a new board, Klishas said. Rusal's Rus­sian de­posi­tary shares fell 0.5 per­cent to 474.52 rubles on the Micex ex­change. The trans­ac­tion will prob­a­bly be com­pleted in May or June, he said, adding that No­rilsk plans to sell shares in In­ter RAO within two years. -Bloomberg

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