Russia's metal majors to form a super-giant?

Shares in Norilsk Nickel rose on Monday as the market welcomed news it had another potential buyer. Russia's aluminium major Rusal has offered to buy a 25% stake in the metals company.

Two of Russia's richest men, Vladimir Potanin and Mikhail Prokhorov, continue to work out what to do with their biggest asset: the world's largest nickel miner Norilsk Nickel. The company is worth more than $US 50 billion.

Prokhorov wants out. He quit as CEO in March and set up a new company Onexim. He told RT earlier this year that global nickel prices are set to fall and he wants to focus on energy.

Last week, after months of speculation, Prokhorov offered 25% plus one share stake in Norilsk to Potanin for $US 15.7 billion.

The huge amount of money involved explains why the two long-time partners  have taken so long to get this far.

But Potanin has less than 45 days to accept Prokhorov’s offer.  Several market watchers doubt he has the money.

Enter player number three: Oleg Deripaska.  He's the major shareholder in aluminium giant Rusal.

Prokhorov's Onexim Fund and Rusal announced on Friday that if Potanin does not come up with the money, Rusal will take the blocking stake in Norilsk Nickel off Prokhorov’s hands.  The deal would give Prokhorov an 11% stake in Rusal and an unspecified amount of cash.

Tim McCutcheon, a partner at investment consultancy DBM Capital, told RT the deal could be sealed early next year.

“There are a lot of technical things to happen first, but in theory this could happen by February,” McCutcheon said.

Many analysts say Deripaska is more likely than Potanin to buy the stake.  They even say the deal could be a first step towards a merger between Norilsk Nickel and Rusal.

But Head researcher at Alfa Bank, Ron Smith, says deals of this size are never over until the last paper is signed.  He predicted a final twist in the tale.

“It will be interesting to see what the government finally comes out with, because they are going to have a piece of this,” Smith said.