Norilsk will not sweeten its offer to Rusal

If $12 billion was not enough to encourage Rusal to unwind its 25% share of Russian nickel giant Norilsk, a better offer may not be forthcoming.

Norilsk （NILSY） is embroiled in an extremely fractious boardroom fight between Rusal and the Interros conglomerate, which has gotten a slim upper hand with roughly 30% of the company.

Rusal had previously bought into Norilsk hoping to encourage a merger between it and its own aluminum business, creating a global powerhouse dominant across several industrial metals as well as platinum.

But as those hopes failed to materialize, relations between the key shareholders have become more tense, even coming to the attention of Russian prime minister Vladimir Putin.

Now that Interros has a majority on the NILSY board, it has offered Rusal a 14% premium to sell, although the offer will expire tomorrow.

After that deadline, NILSY management warns, future proposals will probably not be so generous. It may discuss terms, but statements that the company “will not be able to propose to the aluminum producer such lucrative terms for exiting its investment in Norilsk in the short and medium term” are pretty unambiguous and may have been misinterpreted.

Instead, the company will launch into a $4 billion general buyback in order to streamline the shareholder base ahead of what could become a real boardroom war ahead.

The recent announcement that private commodities trader Trafigura will be coming up with $3.5 billion to buy an 8% stake in NILSY may be part of this. Analysts have been scratching their heads trying to figure out where the financing will come from or why the deal makes sense to NILSY management now.

In any event, Rusal has said it wants at least $15 billion — 40% more than its shares are worth on the open market — to even consider selling out.

（source from:www.community.nasdaq.com）