Rusal With Owner’s $12.8 Billion Snub to Investors

United Co. Rusal, the biggest aluminum producer, is trailing Alcoa Inc. and all other peers as billionaire founder Oleg Deripaska snubs shareholders’ pleas to end a two-year battle for control of OAO GMK Norilsk Nickel.

Rusal, trading at about 6.5 times estimated 2011 earnings, has the lowest valuation on that measure among its five main peers, with Alcoa at about 12.3 times earnings and Aluminum Corp. of China Ltd. at 11.9 times, Deutsche Bank AG data show. Moscow-based Rusal has also lagged behind Alcoa’s share gains since the Russian company listed in Hong Kong on Jan. 27, 2010.

Chief Executive Officer Deripaska, who rebuffed two offers last year for Rusal’s 25 percent holding in Norilsk, received a sweetened $12.8 billion bid last week from the nickel company to buy back most of its stake. Deripaska rejected that price in an interview with CNBC. The holding’s market value has risen 56 percent in a year to $11.4 billion, almost half Rusal’s value.

“A sale of the Norilsk Nickel stake at a premium to the market may prove to be the best outcome for UC Rusal, putting the company in a solid net cash position and opening the door to development opportunities, both organic and through M&A,” Marat Gabitov, an analyst in Moscow at UniCredit SpA, said in a note.

Investors in Rusal’s initial public offering a year ago, including billionaire Li Ka-shing and New York hedge-fund manager Paulson & Co., saw the stock tumble as much as 38 percent before recovering. Rusal’s 21 percent gain since its listing compares with a 30 percent jump for Alcoa. While the rebound was helped by an increase in Norilsk’s value, Rusal would do best to sell the stake, according to some analysts.

“Rusal has benefited from its premiums from Norilsk but if it were to sell its stake at a premium, then that would also be well received by investors,” said Helen Lau, a Hong Kong-based analyst at UOB-Kay-Hian Ltd. “The key issue now is the company’s relationship with Norilsk.”

Deripaska has been embroiled in a dispute over control of Norilsk with fellow shareholder Vladimir Potanin since 2008. The battle has also drawn in Rusal investors including Glencore International AG and Mikhail Prokhorov, who favors a sale, and Trafigura Beheer BV, which agreed to buy 8 percent of Norilsk.

Rusal investor and Chairman Viktor Vekselberg also sought to maintain talks with Norilsk over the stake in the face of opposition from his CEO, Interfax reported Jan. 24.

Rusal said in an e-mailed statement on Feb. 11 that its board would consider the latest offer received from Norilsk. Maria Uvarova, a Norilsk spokeswoman, and Vera Kurochkina, a spokeswoman for Rusal, declined to comment further.