Shall we talk?
By Ekaterina Derbilova
At St. Petersburg Economic Forum Victor Vekselberg complained that after purchasing a 30 percent stake in Swiss Sulzer he was facing hostility of its Board. The lawyers that gathered at the London forum explained to the Russians what exactly they were doing wrong.
Recently Russia's foreign investments abroad have doubled each year; however, there could have been many more transactions but for the blunders made by the Russians, says Dmitry Afanasiev, partner in Egorov, Puginskiy, Afanasiev and Partners partner Dmitry Afanasiev says. The Chinese state-owned investment funds are chasing after Western assets more discretely and face no such resistance, the lawyer claims.
A notorious image and lack of experience rank first among the problems that the Russian investors face abroad. The Western environment is quite different from the one Russian investors are used to, Hengeler Mueller partner Oleg Luzanov states. Foreigners are not accustomed to find who has acquired stakes in their company from the statutory disclosure statements; they expect the buyers to approach them and talk to them.
Patrick Dziewolski, a partner at French Bredin Prat, cites the VTB case: nobody understood why they had purchased a 5 %percent stake in EADS, which led to a weak welcome. VTB did it all correctly, Boeing - Russia-CIS President Sergey Kravchenko disagrees: it made a disclosure statement after purchasing the 5 %percent stake; if they had made public their intention to buy in advance, the market price of the stake would have soared. Per Articles of Association, since the stake is under 5 %, Dziewolski protests, they could have notified the company, and the company could have refrained from disclosing the information to the market. No VTB official was available for comment yesterday.
They should have explained the purpose of that transaction, Dziewolski recommends as a representative of EADS and Arcelor. The latter got Severstal involved as a white knight to avoid the takeover threat by Mittal Steel, but the Arcelor's shareholders considered it rather as a poison pill, Dziewolski says. In fact, the shareholders were asked to choose whether they would prefer a Russian or an Hindu without really discussing any business strategies. Severstal speaker Olga Antonova declined to comment on the subject.
Investor's origin is not really the point. Everyone is happy with Roman Abramovich's purchase of Chelsea, including the fans, but the Arsenal case is very different, English Slaughter and May partner Jeff Twentyman says; the reason lies in the lack of transparency rather than in Alisher Usmanov's Russian nationalty. The transparency is the key, the rest is irrelevant, Dutch De Brauw Blackstone Westbroek partner Bernard Roelvink agrees. Metalloinvest speaker declined to comment.
Russian companies have a handful of successful transactions under their belt. US Wachtell, Lipton, Rosen, & Katz partner Andrew Nussbaum, believes that the victory of Norilsk Nickel over Swiss Xstrata in their bid for Canadian LionOre was exemplary, and no one expected it. Here everything is for sale, Nussbaum jokes in Russian, Feel free to come and buy, you will be most welcome!