Norilsk Gains as RusAl Favored

Norilsk Nickel, the country's biggest miner, gained for a third day in London trading as investors bet United Company RusAl majority owner Oleg Deripaska will acquire a stake in the company and eventually take it over.

Vladimir Potanin has until Friday evening to match Deripaska's $15.7 billion bid for a 25 percent stake held by Potanin's former business associate Mikhail Prokhorov.

"The Kremlin will want control of Norilsk to pass to a company that it regards as one its proxies," said Chris Weafer, chief strategist at UralSib. "It's Deripaska."

Norilsk shares sank 7.5 percent last week as shareholders failed to approve a plan to spin off the company's electricity assets. They climbed 3.2 percent to 6,623.45 rubles Thursday on the MICEX exchange, their biggest gain in almost four weeks.

Analysts at banks including Troika Dialog, Renaissance Capital and Lehman Brothers have said Potanin, who owns 25 percent of Norilsk, will not raise enough cash before the deadline because of turmoil in global credit markets.

"It's a big chunk of change to go out and borrow in this market," Weafer said. "The uncertainty is making bankers very shy in providing the money."

Potanin's Interros holding has no comment to make regarding the stake, spokesman Andrei Kirpichnikov said Thursday. Alexei Ryabinkin, spokesman for Prokhorov's Onexim Group, said the company would not comment on the sale of the stake until the offer expires at 9 p.m. Friday.

Prokhorov and Potanin on Wednesday agreed to sell part of their stake in Norilsk. KM-Invest, the company that holds the shares, said Wednesday that it would sell 2 percent of Norilsk and 7.4 percent of Polyus Gold, which are worth 24.5 billion rubles ($990 million) and 15.1 billion rubles, respectively. KM-Invest holds 8.1 percent of Norilsk in total.

Deripaska told the Financial Times in a July 13 interview that he would "give up" RusAl to the state, if asked.

The anti-monopoly service has not received an application from RusAl to buy the 25 percent of Norilsk, the service's head of industrial supervision, Alexei Ulyanov, said Thursday. "We are following the situation closely," he said. A review would take as long as three months, he said.

"Antitrust authorities will probably keep RusAl's application for Norilsk shares hanging until the March election," said Vladimir Zhukov, an analyst at Lehman Brothers. "It's unclear what happens after the election."