Norilsk Won't Raise Buyback Offer to RusAl

Norilsk Nickel said it won't raise its $12.8 billion offer to buy back shares from Oleg Deripaska's United Company RusAl because it doesn't want unmanageable debts.

"The price of the offer is fair and based on the financial capability of Norilsk," Norilsk president Andrei Klishas said. "The company can't take a higher risk and larger amounts of debt on its balance."

Deripaska has rebuffed three offers since October to sell out of Norilsk, even as RusAl investors, including billionaires Mikhail Prokhorov and Viktor Vekselberg, push for a sale.

"Norilsk has about $2 billion on the balance, and treasury shares, which it can use to raise the financing," UBS analyst Kirill Chuiko said. "It can afford an even more expensive purchase, but there is no sense in overpaying."

Deripaska, whose dispute with fellow Norilsk holder Vladimir Potanin dates back to 2008, snubbed a $9 billion buyout offer from the billionaire in October and a $12 billion bid from Norilsk in December for RusAl's entire 25 percent holding.

The aluminum company has until March 4 to respond formally to Norilsk's latest offer, made Feb. 11, which represented a 43 percent premium to the company's share price at the time.

Deripaska rebuffed Norilsk's latest offer in a Feb. 16 interview with CNBC, saying "there is a price, but not the price [that] is established now."

A deal must be approved by 50 percent of voting shareholders, according to RusAl's charter. Deripaska holds 47 percent of the company.