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Russia's mining oligarchs are fast discovering that their billionaire
peers do not make easy deal partners. More evidence of that emerged
Tuesday when Kazakhmys plc, a Kazakh copper miner listed in
London, sought to cool speculation it was a willing target, following
an approach by Russia's ZAO Metalloinvest.
Kazakhmys, which has a market capitalization of £6.76 billion ($13.6 billion), is 45.8% owned by its billionaire chairman, Vladimir Kim. The Kazakh government holds 15% of the company. Russian billionaire Alisher Usmanov controls Metalloinvest.
Usmanov, whose fortune was valued at $5.5 billion by Forbes, was reported by the Financial Times to be seeking a deal that would leave him with control of the combined group. A combined group would have an estimated value of between $40 billion and $50 billion. Neither Kim nor the Kazakh government is likely to be bought cheaply, and both will be interested in more than just the cash on the table. Kim is already sitting on a personal fortune of $4.55 billion, according to The Sunday Times Rich List in 2007, suggesting that money alone may not prompt him to sell. The involvement of the Kazakh government adds an unpredictable political aspect to any negotiations. Russia's oligarchs, like Usmanov, are widely viewed as proxy owners of their companies, guided by the hand of the Kremlin. Metalloinvest's approach for Kazakhmys is the latest in a spate of attempted dealmaking amongst Russia's mining oligarchs in which Usmanov is proving to be a prime mover. See the full story on TheDeal.com for details on other deals. - Paul Whitfield See related feature: In flux Categories Deal Video
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