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. Last Updated: 07/27/2016

Potanin, RusAl Battle Over Norilsk Buy

Shares in Norilsk Nickel opened up Monday, only to close down 5.1 percent in a falling market following an announcement that its subsidiaries had bought an 8.7 percent stake in the company.

Shares were up as much as 5.2 percent on the MICEX at 11:00 a.m. as analysts said the acquisition strengthened the position of a major shareholder, billionaire Vladimir Potanin's Interros, and weakened that of the other major shareholder, United Company RusAl.

"We contend that the interests of minority shareholders are currently more aligned with those of Interros, which is seeking to negotiate a better deal with RusAl for itself and consequently other Norilsk Nickel shareholders, so we regard the news positively," Troika Dialog said in a morning comment.

"This would leave RusAl with weak negotiating positions in talks on the creation of a national mining champion in Russia," Troika added.

Norilsk said Sunday evening that three of its subsidiaries had bought around 8.7 percent of its shares, a move that RusAl called unlawful. Norilsk, in a statement, gave no reason.

RusAl hit out at Potanin and Norilsk CEO Vladimir Strzhalkovsky, saying they were using loopholes in Russian legislation to maintain full control of the company.