Prokhorov To Consider 3-Way Deal On Metals

ST. PETERSBURG — Billionaire investor Mikhail Prokhorov said Saturday that he would not rule out a three-way merger of Norilsk Nickel, United Company RusAl and Metalloinvest, but said it needed "detailed consideration."

"I have no doubts about the profitability of the Norilsk-RusAl merger, but Metalloinvest's participation is to be considered by investment banks," Prokhorov said on the sidelines of the St. Petersburg International Economic Forum, where he sat in the last row of the audience in several sessions. "I am not a specialist in iron ore, so I need some time to find out what it's all about."

A Norilsk-RusAl merger was inevitable, Prokhorov said. "The global trend is toward consolidation, which increases companies' competitiveness."

Surrounded by a group of reporters at the end of one afternoon session, Prokhorov expounded on his strategy in Norilsk and Polyus Gold, promised news about his future plans on June 16, and also talked about his personal relationship with his former business partner, Interros head Vladimir Potanin.

Prokhorov sold his 25 percent stake in Norilsk, the world's largest nickel producer, to aluminum giant United Company RusAl in April, for an undisclosed sum and 14 percent of RusAl.

Late last month, Potanin and Alisher Usmanov, the half-owner of iron ore company Metalloinvest, announced that they would seek to create a metals giant by merging their companies and invited RusAl to join.

RusAl majority owner Oleg Deripaska, the country's richest man according to Forbes, declined to comment on the offer at the forum on Saturday.

"Much will be decided at the June 30 [Norilsk] shareholders meeting," Prokhorov said of the offer by Potanin and Usmanov, adding that he would seek election to Norilsk's board and was not looking to change its management.

Polyus, the country's biggest gold producer, in which Prokhorov and Potanin each own about 30 percent, will increase annual output by 50 percent to 55 tons to 57 tons by 2011, Prokhorov said.

Prokhorov's Onexim Group offered last month to buy a 6.54 percent stake in Polyus, but but the bid was rejected. "I wanted to increase my control over [Polyus] but failed," Prokhorov said.

He said he had not broken any agreements made with Potanin during their protracted business divorce, which concluded in May. "I didn't break any agreements, the situation simply changed," he said.

Prokhorov said he was satisfied with the assets he had received.

"It's OK. And we are still friends," he said.