Bloomberg News

Prokhorov Offers Norilsk Stake for $15.7 Billion

November 21, 2007

Mikhail Prokhorov offered to sell most of his stake in OAO Norilsk Nickel to Vladimir Potanin for $15.7 billion, a transaction that would give Potanin majority control of the world's largest nickel and palladium producer.

Prokhorov's Onexim Group made the offer to Potanin's Interros Holding Co. today, Onexim spokesman Alexei Ryabinkin said by phone. The sale would be for 25 percent plus one share of Moscow-based Norilsk. It comes ``at a time of great interest in the stake from other companies,'' Ryabinkin said.

Oleg Deripaska, owner of United Co. Rusal, had talks with Prokhorov in the summer on buying a stake in Norilsk, Vedomosti reported on Oct. 24.

Potanin, who already has a 25 percent stake in Norilsk, and Prokhorov have been in talks since January on how to split their jointly held assets including gold miner OAO Polyus Gold, turbine maker OAO Power Machines, media holding Prof-Media, real-estate developer Open Investments and lender Rosbank.

Onexim is seeking to sell its Norilsk stake for 12.5 percent more than the 30-day average market price of Norilsk shares. Norilsk climbed 1.4 percent to 6,898.01 rubles ($283.5) on the Micex stock exchange in Moscow, valuing the company at 1.3 trillion rubles.

Interros will buy Prokhorov's shares only on ``market terms'' and is seeking an independent valuation, spokeswoman Nina Dementsova said by phone today. ``We haven't offered a price as yet. Price and deadlines are under negotiation.''

Potanin has 30 days to decide on whether to go ahead with the acquisition and 45 days to complete it, said Onexim, which is being advised by Renaissance Capital.

Prokhorov holds a combined 28 percent of Moscow-based Norilsk, including a 3.7 stake held through KM-Invest, a company jointly owned by the two billionaires.

To contact the reporters on this story: Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net; Yuriy Humber in Moscow at yhumber@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net


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