OAO GMK Norilsk Nickel’s board will discuss Aug. 15 holding a third share buyback this year for Russia’s largest mining company.
The plan follows a proposal by billionaire shareholder Vladimir Potanin’s Interros Holding Co., the company said in a statement on its website today. The company will consider the price of its last buyout offer to shareholder United Co. Rusal when setting the level for the transaction, the statement shows.
Norilsk unit Corbiere Holdings Ltd. announced a $1.2 billion share buyback on April 5 after spending $3.3 billion at the beginning of the year to purchase a 6.85 percent stake. Norilsk has also made offers to acquire its stock from Rusal, the latest being a $12.8 billion bid for a 20 percent holding equating to about $335 a share that Rusal rebuffed in March.
At that level, a new share buyback would offer investors a 56 percent premium to the current market price, George Buzhenitsa, a Deutsche Bank analyst, said by phone in Moscow. “If this is the case, I think the offer will be made for a small amount of shares,” he said.
The buyback will be conducted by a Norilsk unit, the agenda for the Aug. 15 board meeting seen by Bloomberg News shows. The terms of the offer will be based on the recommendations of banks that consult on the deal, along with the price of the last offer to Rusal, the agenda shows.
The Interros press office and Norilsk spokeswoman Erzhena Ishenko declined to comment further on the buyback plan. Rusal’s press office wasn’t immediately able to comment.
Norilsk agreed in June with a group of international banks $800 million of financing over one year, the company said in its annual report today. The funds may be partly used to finance a buyback, said Deutsche Bank’s Buzhenitsa.
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