Prokhorov buys into Uralkali as Russia seeks to end potash row
Russian tycoon Mikhail Prokhorov agreed on Monday to buy Suleiman Kerimov's 21.75 percent stake in Uralkali, the world's largest potash miner, in a deal that seeks to calm tensions over the collapse of a sales cartel.
Sources familiar with the deal said it had been blessed by President Vladimir Putin as a way of repairing ties with ally President Alexander Lukashenko of Belarus - which arrested and prosecuted Uralkali's boss after the Russian firm quit the marketing pact in July.
Uralkali's shares rallied 2.6 percent on the news, extending gains made towards the end of last week on speculation that a deal was imminent. Talks continue on the sale of stakes held by Kerimov's partners, the sources said.
Analysts doubt, however, that Uralkali's sales partnership with state-owned Belaruskali, which had controlled 40 percent of the $20 billion global market for the soil nutrient, can be put back together.
Prokhorov's investment firm, Onexim, said it would complete the transaction shortly but did not disclose terms of the deal, which it said does not require regulatory approval.
"The purchase of the stake in Uralkali is a long-term investment in a company that is unique from the standpoint of its position in its industry and its role in the world economy," Onexim CEO Dmitry Razumov said in a statement.
Prokhorov is a long-time former business partner of Kerimov, who has launched a political career. He ran against Putin in last year's presidential election, placing a distant second, but remains a leading figure in the business establishment.
Sources on both sides of the talks said Kerimov's asking price was based on a $20 billion equity valuation but the final price was flexible and would probably be slightly lower.
"Valuations are still being pushed backwards and forwards," one financial source said. "There is still quite a lot of wood to chop in terms of negotiating it and funding."
Prokhorov, who owns the U.S. professional basketball team Brooklyn Nets and who is worth $13 billion, according to Forbes magazine, is flush with cash after selling his stake in gold miner Polyus a year ago to Kerimov and partners for $3.6 billion.
State-controlled banks Sberbank and VTB, and possibly a European bank, may back the deal, sources said.
The rally in Uralkali shares extended gains made into Friday's close, when the business had a market value of $15.8 billion.
Sources familiar with the talks have said that Kerimov, the Dagestani-born owner of top-flight Russian soccer club Anzhi Makhachkala, was a reluctant seller.
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