Uralkali Investor Kerimov Said to Get New Approach for Stake
Billionaire Suleiman Kerimov received a new approach for his stake in potash producer OAO Uralkali from Russian property investor Alexey Khotin, according to four people with knowledge of the matter.
Khotin contacted Kerimov about the 33 percent stake he shares with two partners, the people said, asking not to be identified because the discussions are private.
The lack of an agreement to buy Kerimov’s stake is delaying a revival of a potash marketing partnership with Belarus, destroyed by Uralkali’s withdrawal in July. Belarusian President Aleksandr Lukashenko has said a reconciliation of the venture that accounted for 40 percent of global exports can only be considered if Uralkali’s ownership changes.
“As Lukashenko has made clear, he won’t work with Kerimov so the longer the deal is not happening the more difficult it will be to restore the partnership between Belarus and Uralkali in the event of ownership changes in Uralkali,” Elena Sakhnova, a VTB Capital analyst in Moscow, said by phone. “Belarus has started to boost its own sales and it will soon get the marketing expertise it lacks now.”
Billionaire Mikhail Prokhorov’s Onexim, which Bloomberg News reported last month is weighing a bid for the stake, has since proposed exchanging assets, including shares in United Co. Rusal (486), and cash for the Uralkali holding, said two of the people with direct knowledge of the matter.
Vladimir Evtushenkov, the billionaire chairman of the AFK Sistema investment company, said yesterday he’s interested in acquiring Uralkali at the market price rather than at a premium, Interfax reported from Naryan Mar in northern Russia. He’s the first to publicly confirm he’s considering bidding for the world’s largest potash producer.
Uralkali roiled the $20 billion potash market at the end of July after withdrawing from the trading venture with its Belarusian partner, accusing it of selling cargoes outside their marketing agreement. The Russian company said it would increase output of the soil nutrient, sending shares of fertilizer producers plunging.
Andrey Belyak, a spokesman for Onexim, declined to comment, as did Anton Averin from Kerimov’s investment holding company Nafta Moskva. Khotin wasn’t available when contacted at his office in Moscow and didn’t return a call or fax message seeking comment.
Vedomosti newspaper reported earlier this year that Khotin holds assets through a number of companies with his father and never gives interviews. Forbes magazine’s Russian edition estimates the Khotins’ annual income from their real-estate business at $400 million. The family this year purchased Dulisma, an oil producer.
Khotin’s family moved to Russia about a decade ago from Belarus, according to Vedomosti and Forbes. That may make him more acceptable to Lukashenko, Luis Saenz, head of equity sales and trading at BCS Financial Group in London, said in an e-mailed note.
The cash component of Prokhorov’s proposal may be enough to cover the debt Kerimov incurred when he bought his Uralkali stake, the people said. Kerimov hasn’t agreed to the offer, they said. Prokhorov controls 17 percent of Rusal, the world’s biggest aluminum producer, valued at about $800 million at current share prices.
Uralkali rose 0.2 percent to 175.22 rubles per share at 2:44 p.m. in Moscow today, after falling as much as 0.5 percent at the open, while Rusal advanced 1.6 percent.
Kerimov and his partners began receiving offers for the 33 percent stake in Uralkali after Belarus arrested Chief Executive Officer Vladislav Baumgertner on Aug. 26, a month after he withdrew his company from Belarusian Potash Co.
Along with Onexim and Khotin, Vladimir Kogan, a longtime ally of President Vladimir Putin, and billionaires Mikhail Gutseriev and Evtushenkov are weighing bids for the stake, according to people with knowledge of the plans.
Evtushenkov also said yesterday that he has considered bidding together with Gutseriev or Sberbank, Interfax reported.
Lukashenko has supported a bid by Gutseriev, who had ties to the country through his former position as head of OAO Slavneft when the oil venture was owned by the Russian and Belarusian governments. Gutseriev fled Russia through Minsk in 2007 while being investigated for tax evasion. The charges were dropped and the businessman has since returned to Russia.
Kerimov, whose stake will rise to 38 percent once Uralkali cancels treasury stock next year, is seeking a price for his holding based on a market value for Uralkali exceeding $20 billion, people familiar with the matter said in September. That would be a premium of more than 20 percent to the current share price.
Putin may discuss Uralkali issues with Lukashenko this week, Kremlin aide Yuri Ushakov said today.
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