Oleg Deripaska is urging billionaire Roman Abramovich to buy about a 6.9 percent stake in OAO GMK Norilsk Nickel as shareholders feud over the Russian company’s management, according to three people familiar with the matter.
Deripaska’s United Co. Rusal, with a quarter of Norilsk, is seeking to persuade Abramovich to buy treasury stock, said the people, who declined to be identified as talks are preliminary. The stake is currently worth about $2 billion. Abramovich may later raise his share to 10 percent, Kommersant said earlier.
Deripaska has been locked in a feud with fellow billionaire and Norilsk shareholder Vladimir Potanin over strategy at the world’s largest nickel producer for about four years. Potanin may lose his control of Norilsk should Abramovich buy a stake and other treasury stock is canceled, said Kirill Chuyko, head of equity research at Moscow-based brokerage BCS. Abramovich was an investor in Rusal until 2004, when he sold to Deripaska.
“We view the entrance of an influential and well-connected third party as added insurance that the boardroom conflict will not resume after a resolution is reached,” Yuriy Vlasov and Roman Gorokhov, JPMorgan Chase & Co. analysts, said in a note.
Potanin and Deripaska have been discussing the possibility of boosting Norilsk dividends as part of a plan that seeks to try to resolve the dispute, two people with knowledge of the matter said last month, declining to be identified. One option in the talks is for Potanin to become a candidate to replace Vladimir Strzhalkovsky as chief executive officer of Norilsk.
Potanin controls Norilsk through the 28 percent held by his Interros group and the 17 percent in treasury stock voted on by management friendly to the billionaire, according to Chuyko.
Norilsk plans to cancel shares equal to 10 percent of the company in the first quarter, leaving management controling about 7 percent. Deripaska is CEO of aluminum producer Rusal.
Rusal rose as much as 2.6 percent to an almost two-month high and was at 184 rubles by 3:24 p.m. in Moscow. Norilsk slid 0.8 percent to 4,645 rubles, valuing it at about $28.6 billion.
The press services of Norilsk, Rusal and Interros declined to comment when contacted by Bloomberg, as did John Mann, an Abramovich spokesman. Larisa Zelkova, a Norilsk board member from Interros, said there were talks on Potanin becoming CEO.