OREANDA-NEWS. On November 26, 2007 Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announced that it has directed its mandatory offer (public offer) to Elgaugol OAO to acquire the remaining shares in the company from its minority shareholders, reported the press-centre of Mechel.

As previously announced, Mechel’s subsidiary, Mechel Invest OOO, became the winner in the auction, which was held on October 5, 2007, to acquire 75% less one share of Yakutugol OJSHC and 71,21% of the shares of Elgaugol OAO (68,86% of the shares was acquired in the auction and 2,35% are owned by Mechel OAO affiliate, Yakutugol OJSHC). The acquisition of the controlling stakes in the companies is in line with Mechel's strategy to further develop its mining segment, intensify synergies between the group’s subsidiaries, and increase its coking coal output.

In compliance with Article 84.2. of the Federal Law On Joints Stock Companies, within a 35-day term following the date of transfer of the ownership of Elgaugol OAO shares, Mechel Invest OOO directed its mandatory offer to Elgaugol OAO regarding purchasing the remaining 28,79% of shares from the coal company’s minority shareholders. Elgaugol OAO received the offer on November 22, 2007. The mandatory offer of Mechel Invest OOO provides for the acquisition of 245,000 shares of Elgaugol OAO for RUR14,760.44 (about US$600) per share, which corresponds to the highest price of the shares over the last six month formed as the results of the auction held on October 5, 2007. The minority shareholders are entitled to accept the offer within 70 days following the date of Elgaugol OAO’s receipt of the mandatory proposal.