In Russian potash market, Number-2 tries harder
Silvinit, until now a second string potash producer, challenges Uralkali, with state help.
Until recently, Silvinit, a major Russian potash miner, appeared to be playing second-fiddle to its larger, and financially more powerful mining neighbour in the Urals, Uralkali. But in the hungry Russian resource market, with potash's accelerating value multiples in the commodity and share markets, the fiddler can wind up being on the menu to be eaten -- and that appeared to be the direction in which Silvinit was headed.
One takeover candidate was Uralkali, which listed its shares in London in October, and has since seen its market capitalization rise to $11.4 billion -- more than double its listing target. Uralkali is controlled by Dmitry Rybolovlev. In October 2006, Uralkali had announced an IPO plan for the sale of 21% of its shares, offered at the time at $2.05-$2.45 per share. This past October, the company placed 12.75% of its stock at $3.35/share. The current price ranges between $5.35 and $5.75.
For Silvinit, the second apparent bidder was the state-owned Gazprom spinoff, Sibur-Mineral Fertilizers, a unit of the Sibur chemicals group. Mineweb reported their strategy in September:
www.mineweb.com/mineweb/view/mineweb/en/...oid=27244&sn=Detail
Since then, however, sources at Gazprom and Sibur-MF have acknowledged they must pull in their horns; that is to say, they are re-aiming their asset acquisition plan at targets they can afford. For the time being at least, this means sticking to nitrogen fertilizer assets, which process natural gas and convert ammonia. Even they have been expensive, difficult, and slow to pick these off. This month, Dyed Moroz ("Father Frost", the Russian Santa Claus), will be visiting the potash and phosphate miners with a reprieve, not with an offer they can't refuse.......
www.mineweb.com/mineweb/view/mineweb/en/...oid=41749&sn=Detail
Silvinit, until now a second string potash producer, challenges Uralkali, with state help.
Until recently, Silvinit, a major Russian potash miner, appeared to be playing second-fiddle to its larger, and financially more powerful mining neighbour in the Urals, Uralkali. But in the hungry Russian resource market, with potash's accelerating value multiples in the commodity and share markets, the fiddler can wind up being on the menu to be eaten -- and that appeared to be the direction in which Silvinit was headed.
One takeover candidate was Uralkali, which listed its shares in London in October, and has since seen its market capitalization rise to $11.4 billion -- more than double its listing target. Uralkali is controlled by Dmitry Rybolovlev. In October 2006, Uralkali had announced an IPO plan for the sale of 21% of its shares, offered at the time at $2.05-$2.45 per share. This past October, the company placed 12.75% of its stock at $3.35/share. The current price ranges between $5.35 and $5.75.
For Silvinit, the second apparent bidder was the state-owned Gazprom spinoff, Sibur-Mineral Fertilizers, a unit of the Sibur chemicals group. Mineweb reported their strategy in September:
www.mineweb.com/mineweb/view/mineweb/en/...oid=27244&sn=Detail
Since then, however, sources at Gazprom and Sibur-MF have acknowledged they must pull in their horns; that is to say, they are re-aiming their asset acquisition plan at targets they can afford. For the time being at least, this means sticking to nitrogen fertilizer assets, which process natural gas and convert ammonia. Even they have been expensive, difficult, and slow to pick these off. This month, Dyed Moroz ("Father Frost", the Russian Santa Claus), will be visiting the potash and phosphate miners with a reprieve, not with an offer they can't refuse.......
www.mineweb.com/mineweb/view/mineweb/en/...oid=41749&sn=Detail
