MOSCOW (Reuters) - Norilsk Nickel GMKN.MM should be at the core of any potential merger with one or more privately owned Russian miners, its chief executive said in an interview with Russian daily Kommersant published on Monday.
Denis Morozov said Norilsk was in the early stages of evaluating a merger proposal from Metalloinvest, the iron ore and steel firm controlled by billionaire Alisher Usmanov, but had received no concrete proposal from United Company RUSAL.
“Theoretically, anything is possible. But in my view, if such deals are possible, then it would only be on the base of Norilsk Nickel,” Morozov told Kommersant in the interview.
While Norilsk, the world’s largest nickel miner, is open to potential merger proposals, Morozov said rumors unaccompanied by an official approach could lead to share price volatility.
“This creates unpredictability and potential risks, most of all for our minority shareholders,” he said.
Norilsk’s market capitalization is currently $51.9 billion. Its stock, though more than double its worth two years ago, has fallen about 15 percent from its peak in November last year.
Billionaire Mikhail Prokhorov has agreed to sell his 25 percent-plus-one-share stake in Norilsk to UC RUSAL as part of a wider division of assets with his former business partner and another large shareholder in Norilsk, Vladimir Potanin.
UC RUSAL has stated its long-term intention to effect a merger of the two companies and Russian media have speculated that talks to this end have already begun.
Morozov said in the Kommersant interview that UC RUSAL had yet to become a shareholder in Norilsk.
“I can’t comment on RUSAL’s plans because we have not received any proposals from this company. It’s a private company, so we do not have sufficient information to evaluate the merit of any possible combination,” he said.
He said Norilsk’s management would evaluate Metalloinvest with the help of an external consultant.
“We can’t say when exactly this process will be completed, because the exchange of information only began a short time ago,” he said.
Writing by Robin Paxton; Editing by Paul Bolding
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