Onexim Revokes TGK-4 Buyout Offer

TGK-4 fell 30.2 percent on the MICEX on Monday after Mikhail Prokhorov's Onexim holding company ended an offer to buy the shares that it does not already own.

The fall extended this year's drop to 44 percent, giving it a market value of 31.5 billion rubles ($1.2 billion).

"We're very disappointed at this attempt by Onexim to wriggle out of its legal obligation," said Mattias Westman, CEO of Prosperity Capital Management, which holds 20 percent of TGK-4.

The Tula-based power producer is one of 19 generators the state sold to investors in the past two years to fund upgrades. Onexim made a buyout offer July 30, valid for 80 days. Onexim, which held 48.4 percent of TGK-4 at the time, pledged to pay 2.7 kopeks per share.

Onexim said Monday that it was unable to complete the "mandatory" offer because TGK-4 was added to a list of natural monopolies by the Federal Tariffs Service. Under the law on foreign acquisitions of Russian firms, Cyprus-registered Onexim must get state permission before making an offer, it said.