MOSCOW, November 18 (RIA Novosti) – Tycoon and former Russian presidential candidate Mikhail Prokhorov said Monday that he will buy a 21.75 percent stake of fertilizer giant Uralkali in a deal that could help resolve a dispute between Russia and neighboring Belarus.
Prokhorov’s Onexim investment group said in a statement that it was “shortly” looking to purchase the stake in Uralkali from the current core shareholder, billionaire Suleiman Kerimov.
Onexim did not reveal what it had agreed to pay for the equity in the world’s largest potash producer, but Uralkali’s market capitalization on Monday suggested a 21.75 percent stake would be worth about $3.5 billion. Business daily Vedomosti reported Monday that Kerimov was not prepared to sell for less than $4.35 billion.
Uralkali has been at the heart of a Belarusian criminal investigation opened earlier this year that has generated political tensions between Minsk and Moscow.
The company's chief executive, Vladislav Baumgertner, was detained in Belarus in August after Uralkali pulled out of a cartel agreement with Belarusian state-owned fertilizer giant Belaruskali, sparking steep falls in potash prices.
Uralkali shares rose more than 7 percent on Friday in London on rumors of Prokhorov’s decision to buy. After the announcement Monday, Uralkali shares climbed slightly in London and jumped more than 3 percent in Moscow.
“The purchase of the stake in Uralkali is a long-term investment,” Dmitry Razumov, chief executive of Onexim Group, said in the statement. “We are certain that the potash industry has strong fundamentals.”
Potential buyers of Kerimov’s holding – which he purchased for about $2.5 billion in 2010 – have been subject to much speculation. Recent reports named other interested buyers as Mikhail Gutseriyev, founder of oil company RussNeft, banker Vladimir Kogan, construction tycoon Arkady Rotenberg and Vladimir Yevtushenkov, owner of AFK Sistema.
In a second part of the deal, Kerimov-linked businessmen Anatoly Skurov and Filaryet Galtchev, who currently own 4.8 percent and 7 percent of Uralkali respectively, will sell their stakes to the billionaire owner of Russian fertilizer producer Uralchem, Dmitry Mazepin, Vedomosti reported Monday.
Prokhorov, who is known outside Russia for his ownership of US basketball team the Brooklyn Nets, also controls Russian banking, media, mining and energy assets. Last year he suddenly entered politics to run in Russia’s presidential election, in which he came third.
Uralkali's decision to dissolve the cartel with Belaruskali, one of Belarus' largest companies, caused anger in Minsk, which depends on potash exports for key revenue.
Authoritarian Belarusian president Alexander Lukashenko has said that he was offered a $5 billion bribe by a Russian oligarch seeking to buy Belaruskali.
Kerimov, a secretive billionaire rumored to have close ties to the Kremlin and who Forbes Magazine ranks as Russia's 20th richest man, made a failed bid to buy a controlling stake in Belaruskali in 2011.
Analysts have speculated that Kerimov’s exit from Uralkali will be the preface for Belarus’ release of Baumgertner, and the possible resurrection of the cartel agreement between Uralkali and Belaruskali.
Updated with new details and background