Political hurdle for Kazakh deal
Analysts yesterday warned the political risks were “too great” for a possible merger between Kazakh miner Kazakhmys and fellow Russian miner Metalloinvest, the company founded by billionaire businessman Alisher Usmanov.
Shares in Kazakhmys rose more than 6 per cent after news that Metalloinvest, which mines 40 per cent of Russia’s iron ore, was exploring a merger as an alternative to its own plan to list its shares in London in the autumn.
A potential deal would be structured as a reverse takeover. Evolution Securities said in a research note yesterday: “..the political risks in bringing these two companies together are too great. In our opinion, we believe that the Kazakh government (which holds a 15 per cent stake in Kazakhmys) is unlikely to agree to the company falling under control of a Russian backed company.”
Kazakhmys, the world’s tenth biggest copper producer, is owned 45.8 per cent by its chairman, Vladimir Kim, while chief executive Oleg Novachuk has a 7.7 per cent stake. Investment bank Lehman Brothers is advising Metalloinvest.
