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. Last Updated: 07/27/2016

Evraz Seen in Talks to Acquire Ipsco

Itar-TassAbramovich walking with Rossel, right, after flying into Yekaterinburg's airport in his Boeing-767 plane on Thursday.
North American steel pipe maker Ipsco said it was in talks on a possible takeover after a report in Vedomosti on Thursday that Evraz Group was interested in buying the company.

Shares of Ipsco jumped as much as 14 percent.

"There can be no assurance that any transaction will occur,'' Lisle, Illinois-based Ipsco said Thursday in a statement, without identifying a suitor.

Vedomosti said Evraz Group, Russia's second-biggest steelmaker, was seeking finance from UBS to buy Ipsco, citing a banker it did not identify.

Buying Ipsco would make Evraz the world's ninth-biggest steelmaker.

Shares of Ipsco rose 14.08 Canadian dollars ($12.39), or 9.5 percent, to a record 162.95 Canadian dollars at 12:31 p.m. on the Toronto Stock Exchange after trading was halted earlier. The gain gave Ipsco a market value of about $6.8 billion.

Vedomosti quoted two businessmen familiar with Evraz shareholders as saying the firm's managers held talks with Ipsco executives about a takeover bid a few weeks ago. A banker close to Evraz management told the newspaper that talks were ongoing.

The main owners of Evraz, the country's top steelmaker by domestic output, are billionaires Alexander Abramov and Alexander Frolov. Last July, Millhouse Capital, the investment vehicle of Chelsea football club owner Roman Abramovich and his partners, bought 41.3 percent of Evraz.

Vedomosti said Evraz, which completed a $2.3 billion acquisition of Oregon Steel in January, was now looking for a bigger North American acquisition and was preparing to arrange a credit line with banks, including UBS.

The paper said executives at Evraz and Ipsco had declined to comment on a possible takeover.

Irina Kibina, Evraz's vice president for public relations, and John Mann, a spokesman for Abramovich, declined to comment on the Vedomosti report.

Abramovich on Thursday visited the Nizhny Tagil Metallurgical Plant, which is owned by Evraz, and spoke with Sverdlovsk Governor Eduard Rossel. Details of the talks were not reported.

Evraz produced 16.1 million tons of crude steel in 2006, up 16.3 percent on the previous year.

Ipsco shares have surged this year following the latest wave of steel consolidation, and speculation intensified after a hedge fund said it had built up a 4.6 percent stake in the company.

Evraz has been expanding its holdings abroad in the past two years, acquiring Italian steelmaker Palini e Bertoli and Vitkovice Steel of the Czech Republic in 2005. It received approval from South Africa's anti-monopoly regulator on April 4 to buy control of Highveld Steel and Vanadium, a unit of Anglo American.

Bloomberg, Reuters