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Norilsk Nickel starts buying back stock
8/27/2008 |
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Norilsk Nickel announced on Friday the beginning of a program to buy 4 percent of its own stock from the market, with a 22-percent premium on the market price. The company抯 management, which is loyal to Interros, says that it wants to raise the company抯 capitalization. At Rusal, they are convinced that Norilsk is trying to reduce the minority vote in the company before the annual shareholders meeting. The company is prepared to spend 47 billion rubles (about $2.02 billion) to buy up to 7.9 million shares for 6100 rubles (currently $254) each. Trading on the MICEX for Norilsk stock closed down 3.07 percent on Friday at 4800 rubles per share. ADR are selling for $21, or 5100 rubles per share.
Minority shareholders have reacted variously to the proposal. At Mikhail Prokhorov抯 ONEXIM Group, which sources say, controls 5 percent of Norilsk Nickel, and in Rusal, they say they will not participate in the program. Norilsk Nickel deputy general director Alexander Popov explained that the price the company is offering for its shares is the average price for the last six months. Norilsk Nickel抯 capitalization has fallen by one-third since February. Sources close to the mining company say that Popov抯 departure from his position as head of the supervisory board of Rosbank to work at Norilsk is tied to the buyback program. It is standard practice at Norilsk Nickel. It bought back 3 percent of its shares every two or three years even before the shareholders?conflict. Now that Rusal has bought a blocking package in the company, Interros may be using the procedure for its own goals. |
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