OREANDA-NEWS. September 27, 2010. Norilsk Nickel’s Board of Directors recommended that its shareholders not vote to re-elect the current Board at the EGM slated to take place on 21 October, reported the press-centre of OTKRITIE Financial Corporation.

Board Chairman Vasily Titov mentioned that this recommendation was included in yesterday’s BoD report to shareholders. However the decision of the shareholders meeting could be held invalid, because one of the nominees to the BoD from Rusal, Maksim Sokov, could not confirm his eligibility at the General Director’s meeting held yesterday. Nevertheless, the Board confirmed his candidature so as not to escalate the conflict with Rusal. Rusal denies that Sokov’s was not confirmed, saying that all necessary documents were submitted. This situation could be a ‘time bomb’, since any shareholder could use it to justify a challenge to the results of the meeting on formal grounds.

View: We view this news as neutral for the stock.

Valuation and Action: Norilsk Nickel trades on a 2011E EV/EBITDA of 4.8x, which implies a 16% discount to global peers. We reiterate our BUY rating for Norilsk Nickel and a target price of USD220/share.