MOSCOW (Reuters) - The new owners of two lucrative Russian potash miners are not seeking a quick sell-off in the M&A frenzy set off by BHP Billiton’s BLT.L hostile bid for Potash Corp POT.TO, a senior Russian banker said on Thursday.
A trio of Russian tycoons led by mining and real estate magnate Suleiman Kerimov, Russia’s 19th richest man, have taken combined control of Russia’s top two producers of the yield-boosting fertilizer, Silvinit and Uralkali SILV.MM(URKA.MM).
“Not everyone would like to sell their companies to foreign investors,” Yuri Soloviev, the chief executive of VTB Capital, whose state-controlled parent VTB (VTBR.MM) provided financing for the buyouts, told the Reuters Russian Investment Summit on Monday.
Rio Tinto (RIO.AX) and Canada’s Potash Corp POT.N have considered buying into Uralkali, which has a market capitalization of about $9.9 billion, sources told Reuters last month.
A Russian newspaper said a Rio delegation visited Uralkali’s main mine town last week.
Sources have said they are likely to merge them into one, but Soloviev disagreed.
“The endgame for each individual company could be different,” he said.
Soloviev said Uralkali’s new management would have freer rein to make improvements after the exit of the previous owner, who had a poor relationship with regulators.
Pointing to a valuation gap between the two companies, Soloviev said Silvinit, now worth $6 billion but with a similar production profile to Uralkali’s, should match Uralkali’s $10 billion market capitalization.
“It was not a company that was run on a high level. The new incoming shareholders have a very specific target for transparency. We will see much better corporate governance. They would like to see that asset worth much more,” Soloviev said.
Reporting by Melissa Akin; Editing by Will Waterman