Small Silvinit shareholders seek new Uralkali terms

Wed Dec 22, 2010 5:16pm GMT

* Investor group urges small shareholders to reject deal

* Merger terms seen as poor for Silvinit, good for Uralkali

* Both companies controlled by tycoon Suleiman Kerimov

* Shareholder votes on merger to be held Feb. 4

MOSCOW, Dec 22 (Reuters) - Minority shareholders in Russian potash miner Silvinit SILV.RTS are demanding a revision of its merger with rival Uralkali (URKA.MM: Quote) and should vote against it, an investor rights organisation said on Wednesday.

Silvinit SILV.MM shares slumped 13 percent after details of the merger emerged on Monday, and analysts said deal terms were stacked in favour of Uralkali.

Both companies are controlled by Russian billionaire tycoon Suleiman Kerimov and associates, who are aiming to consolidate their potash empire into a single Russian champion and the world's second-biggest producer. [ID:nLDE6BJ0CY]

"Despite the fact both companies are engaged in the same business and have very comparable production and financial indicators, Silvinit will receive only 39 percent of the combined business ... 25 percent below fair value," Moscow's Investor Protection Association said in a statement.   Continued...

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