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Rusal Rejects Potanin’s $9 Billion Offer for Norilsk

United Co. Rusal, the world’s largest aluminum company, rebuffed a $9 billion offer from billionaire Vladimir Potanin to buy its stake in Russia’s OAO GMK Norilsk Nickel.

Rusal’s investment “is not for sale at any price and is viewed as a critical component of Rusal’s future strategy of diversification,” said Nathaniel Rothschild, chairman of EN+ Group, billionaire Oleg Deripaska’s investment company which controls Rusal. Potanin’s offer “is derisory,” Rothschild said today in an e-mailed statement.

Potanin said he wrote to Rusal Chairman Viktor Vekselberg urging him to discuss selling Rusal’s 25 percent in Russia’s biggest mining company. Potanin, whose Interros Holding Co. also holds 25 percent of Norilsk, told reporters in Moscow that Rusal should either sell out or merge with Norilsk.

“They are just taking a pause by doing this,” Potanin said. “They just repeated what they’ve been saying all along.”

A feud between Potanin and Deripaska’s Rusal dating back to 2008 reignited after a June election of the Norilsk board that gave Rusal three seats to Potanin’s four. A majority of Moscow-based Norilsk’s investors yesterday voted against Rusal’s motion to re-elect the board in a blow to Deripaska’s ambitions to boost his influence.

Potanin has clashed with Deripaska over how Norilsk manages cash and operations. Deripaska wants bigger dividends to help Rusal pay off about $13 billion of debt and a management overhaul, and has offered to buy Potanin’s Norilsk stake.

Proposed Buyout

Potanin backs Norilsk Chief Executive Officer Vladimir Strzhalkovsky’s team and wants to curb Rusal’s control. Potanin said today that Interros, Norilsk and the mining company’s pension fund were among investors were willing to work together on the buyout.

Russian officials have said the government would intervene should the shareholder conflict threaten operations at Norilsk, which is the world’s biggest nickel producer and Russia’s largest mining company.

The two sides should agree “between themselves,” Russian Deputy Prime Minister Igor Sechin said Aug. 31 after a meeting hosted by Prime Minister Vladimir Putin and attended by Potanin and Deripaska in the Arctic city where the company is based.

“If the dispute affects the socioeconomic sphere in Norilsk, then the state may interfere,” Sechin said.

Norilsk fell 90.34 rubles, or 1.6 percent, to close at 5,462.74 rubles in trading on Moscow’s Micex exchange, its biggest drop since Sept. 15.

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