Russian aluminum giant United Co. Rusal PLC has no interest in selling its stake in polar miner OAO Norilsk Nickel and reiterated that the company is undervalued at its current market price, according to a letter seen by Dow Jones Newswires on Tuesday.
In the letter, dated Nov. 1 and sent to Russian billionaire Vladimir Potanin, Rusal Chairman Viktor Vekselberg said that the aluminum producer "is not interested in selling its stake" in Norilsk. Rusal has a 25% stake in the nickel company and is currently locked in a battle for control of Norilsk with Interros, owned by Mr. Potanin and also a 25% shareholder in the miner.
The letter is in response to an Oct. 22 letter from Mr. Potanin in which he put forward a proposal to buy Rusal's stake in Norilsk for $9 billion. This is roughly a quarter of the current market price of Norilsk. He also urged Rusal to come to a decision to either sell its stake or offer a merger with Norilsk.
Rusal's Mr. Vekselberg said in the letter that Mr. Potanin's statement that "the current market price of Norilsk reflects a fair valuation [of the company] in the current market conditions supports Rusal's worries that the potential of the miner is not properly realized in the interests of all shareholders."
He also said that Mr. Potanin's letter will be sent to Rusal board members.
The battle between the two companies has been heating up for some time. Rusal claims Interros and Norilsk management have badly managed Norilsk, causing its share price to underperform. For their part, Interros and Norilsk management accuse Rusal of attempts to gain control of the miner.
Rusal has repeatedly said that its investment in Norilsk is "strategic" and it has no intention to sell.
Interros confirmed it had received the letter and Rusal confirmed its content.
A spokesman for Mr. Vekselberg wasn't available for comment.
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