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The Deal of the Century

…or at least one of them. To whom will Prokhorov’s stake in Norilsk fall? So far everything has been civil in this epic business drama, with the normal use of lawyers and contracts instead of bureaucratic favors, but many are wondering how long the Kremlin will wait on the sidelines. The Times reports:

This is where Moscow watchers say the rivalry between the oligarchs starts to get really complicated. Mr Potanin is said to be proposing to use Norilsk shareholder funds to buy a 25 per cent stake in Gazmetal, allowing Mr Usmanov to use this cash to then buy out Mr Prokhorov. This has concerned a number of London financial institutions who hold minority stakes in Norilsk as they will effectively be subsidising the acquisition of their own company.

The refusal of Mr Prokhorov’s Onexim vehicle to accept Rusal’s buyout terms is thought to be an indication that he is holding out for a better deal from Mr Usmanov.If he succeeds in delaying the sale until the end of this month, the Rusal agreement will lapse and he will be free to sell his shares to the highest bidder. However, Rusal is thought to have warned Onexim that if it fails to honour the sales agreement, the situation will be resolved in a court.At an extraordinary general meeting of Norilsk shareholders yesterday, investors rejected a vote on including Rusal nominated directors on the company’s board.Those directors included both Mr Deripaska and Mr Vekselberg.The rival camps of Deripaska-Vekselberg and Potanin-Usmanov are vying to become the dominant force in the Russian resource sector and control of Norilsk is vital to their success.Norilsk is the world’s largest producer of nickel and has some of the best mineral assets in the world. Whichever side completes its merger will effectively become the mining equivalent to Rosneft and Gazprom in Russia.The Kremlin is said to be ready to step in if the rivalry threatens to harm Russia’s national interests.