Billionaire Suleiman Kerimov and his business partners in OAO Uralkali may reach an agreement to sell their joint 33 percent stake as soon as next week, according to four people with knowledge of their discussions.
Billionaire Mikhail Prokhorov’s Onexim Group is the front-runner to take control of the world’s largest potash maker and may later bring in partners, the people said, asking not to be identified because the talks are private. The stock extended gains to 5 percent in Moscow today after the news, raising the stake’s value to about $5.2 billion.
A sale may defuse a dispute between Russia and Belarus sparked by Uralkali’s July withdrawal from a partnership that marketed 40 percent of global exports. The falling-out and Uralkali’s plan to boost output roiled the $20 billion market for the soil nutrient. Belarus has called for a change in the company’s ownership before a reconciliation is possible.
“The sooner Kerimov sells, the better for Uralkali, as the company needs some certainty for its future,” Elena Sakhnova, an analyst at VTB Capital, said by phone today.
Kerimov and billionaire partners Filaret Galchev and Anatoly Skurov began receiving offers from potential buyers after Belarus arrested Uralkali Chief Executive Officer Vladislav Baumgertner in Minsk on Aug. 26. That was a month after the Russian potash producer abandoned the joint venture with Belarus. The CEO was moved from a KGB prison to a rented apartment in Minsk on Sept. 26, and his arrest was extended for an additional two months on Oct. 28.
Discussions with other possible bidders will continue until a binding sale agreement is signed, the people said. If not set next week, the accord will probably be reached by the end of the month, they said.
Should the deal be completed, Onexim may seek partners and has had contact with OAO Uralchem owner Dmitry Mazepin about it, two of the people said.
Anton Averin, a spokesman for Kerimov’s Nafta Moskva, declined to comment by phone, as did Andrey Belyak, an Onexim spokesman, and Alan Basiev, a Uralchem spokesman.
The new owner will have a 38 percent stake in Uralkali after the company fulfills its promise to cancel about 12.4 percent of stock held as treasury.
Uralkali shares rose 7.1 percent to $27.59 as of 3:15 p.m. in London, and closed at 175.15 rubles in Moscow.
Other bidders for the stake include Vladimir Kogan, a billionaire ally of Russia’s President Vladimir Putin; OAO Russneft owner Mikhail Gutseriev and billionaire Vladimir Evtushenkov; property investor Alexey Khotin, people said last month.