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Last Updated: Jul 15, 2008 - 11:32:09 AM |
The
deal was being structured in the form of a reverse takeover and would
see Metalloinvest's Alisher Usmanov emerge with a controlling stake in
the enlarged business, which would then be relisted on the London Stock
Exchange, the Financial Times Alphaville web site reported on Monday.
The
company resulting from the deal would have a capitalization of $38
billion to $43 billion, analysts said. Metalloinvest, which is
half-owned by Usmanov, has already said it was looking to merge with
Norilsk Nickel to create a world-class metals giant.
Shares in
Kazakhmys, 15 percent of which are held by the Kazakh government,
climbed as high as 13.4 percent on the London Stock Exchange on the
news and ended the day at 12 percent above their opening price.
Because
Kazakhmys is a publicly traded company, the merger offers
Metalloinvest, Russia's largest iron ore producer, an alternative
option for raising additional capital to the IPO Usmanov has been
planning for the fall.
The prospective merger would enable
Metalloinvest to develop more efficiently the eastern Siberian Udokan
copper field, one of the world's biggest, for which it has filed a bid
in an auction that is to be decided in September. Kazakhmys, which has
said it had the necessary capital and technologies to develop the
field, was shut out of the auction when it was closed to foreign
bidders.
The field is estimated to hold 20 million tons of
copper reserves, and Oleg Deripaska's Basic Element, another bidder in
the auction, could be looking at the field as an asset in the struggle
for Norilsk, the country's biggest mining firm.
Analysts warned
Monday, though, that Metalloinvest would not be able to gain control
over the merged company, as the Kazakh government had its own plans for
Kazakhmys and was wary of foreign investors.
Neither of the
parties was providing details on the talks Monday. Kazakhmys issued a
statement saying "it was in very preliminary discussions about a
possible combination of its business with a third party."
"The
merger with Kazakhmys offers no synergies for Metalloinvest," said
Vladimir Zhukov, a metals analyst at Lehman Brothers, which was
handling the prospective merger, FT Alphaville reported.
"But
Metalloinvest might be looking at a longer-term, as this might help it
realize its merger plans with Norilsk without holding an IPO," Zhukov
said.
Kazakhmys' market capitalization stood at $13.7 billion at
Monday's close. Alfa-bank analyst Maxim Semenovykh estimated the
capitalization for Metalloinvest, which is not publicly traded, at $25
billion to $30 billion.
Kazakhmys had earlier been in talks
with Eurasian Natural Resources Corporation, one of the world's largest
producers of ferrochrome, but could not reach agreement on a price. The
Kazakh government had stated publicly that it was looking to merge the
companies.
Source:Ocnus.net 2008
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