October 28, 2021

DealBook: Norilsk Offers Share Buyback to End Long Dispute

Oleg V. DeripaskaSimon Dawson/Bloomberg NewsOleg V. Deripaska is battling with Vladimir O. Potanin, below, for control of Norilsk Nickel.Vladimir O. PotaninAlexander Natruskin/Reuters

MOSCOW — The management of Russia’s largest mining operator, Norilsk Nickel, offered on Friday to buy most of the shares held by one of the company’s two feuding owners and thus resolve the dispute.

Norilsk generates vast profits as the world’s largest producer of nickel and palladium, and is one of the largest producers of copper, platinum, gold, silver and other rare metals. But the two largest owners, who are members of the rich coterie of industrialists known as oligarchs, have been locked in conflict for years for control.

Oleg V. Deripaska, who also owns about half of the world’s largest aluminum company, Rusal, maintains that his co-owner, Vladimir O. Potanin, is trying to force him out and seize full control of Norilsk.

Mr. Potanin, for his part, says he is encouraging the Norilsk management to buy back shares because the company’s proceeds cannot be invested profitably in other mining ventures in Russia, or indeed elsewhere in the world, right now.

On Friday, the company’s Web site said managers had offered Mr. Deripaska’s Rusal company $8.75 billion for 15 percent of the company’s shares. Rusal now holds about 25 percent.

Norilisk said the offer was equivalent to $306 a share, which was a premium of 20 percent above the average market price of the company over the last six months.

Even before the offer, however, Rusal issued a statement saying it was not likely to accept, and accused Mr. Potanin, who owns about 30 percent of Norilsk, of using his influence on the board to compel the company treasury to buy out a rival. This, Rusal said, was harming the interests of minority shareholders.

Rusal says it does not want to sell its share in Norilsk and has rebuffed previous offers. The mine and smelter complex above the Arctic circle in Siberia has been at the center of Russian business intrigues for much of its post-Soviet history.

Mr. Potanin, who is a member of the board of trustees of the Solomon R. Guggenheim Foundation, and Mr. Deripaska have been jostling for control since 2008, when another Russian oligarch, Mikhail D. Prokhorov, sold his stake. Mr. Prokhorov, who now heads a political party in Russia, used a portion of the proceeds to buy the New Jersey Nets basketball team and invest in the Atlantic Yards development in Brooklyn, the site of the team’s planned new arena.

Article source: http://feeds.nytimes.com/click.phdo?i=d2d3ee050d4e5b2c7754971db9224f09