Metalloinvest, a Russian iron ore and steel company owned by billionaire Alisher Usmanov, plans to float up to 25 percent of its shares in an initial public offer in the autumn, sources close to the deal said on Tuesday.

The sources told Reuters that Metalloinvest had picked Merrill Lynch, Credit Suisse, Deutsche Bank and Renaissance Capital to organise the placement, which is expected to take place either in New York or London.

Vedomosti business daily said earlier on Tuesday that Metalloinvest hoped to raise around $3 billion initially by offering a 10 percent stake.

Its existing shareholders will sell another 15 percent of the company in proportion to their current stakes, it said.

Sources close to the deal told Reuters the structure of the placement had not yet been decided upon.

Metalloinvest declined to comment on the report.

Metalloinvest manages the assets of holding group Gazmetall, which includes Russia's two largest iron ore mines and two steel mills that rank the company fifth in terms of output.

Metalloinvest is 50 percent owned by Usmanov, with two other Russian businessmen, Andrei Skotch and Vasily Anisimov, holding 30 and 20 percent, respectively.

One source said Metalloinvest had intensified preparations for the IPO after starting merger talks with metals giant Norilsk Nickel earlier this year.

But now the merger depends also on the world's top aluminium producer, United Company RUSAL, which bought a stake of 25 percent plus one share in Norilsk in May.

The sources said Metalloinvest and Norilsk had failed to agree on the valuation of Metalloinvest.

I believe that the IPO for Metalloinvest is kind of a pressure instrument, as there is a real difference in the valuation of the company (between Norilsk and Metalloinvest), one source said.

It said Norilsk had valued Metalloinvest at around $20 billion. Another source said the figure was $24-$26 billion, not including a $4.6 billion debt.

Metalloinvest shareholders believed that the IPO would show the company was worth $30-$35 billion, both sources said.

Norilsk, which mines a fifth of the world's nickel, has a stock market value of around $55 billion. (Reporting by Tanya Mosolova, Olga Popova and Polina Devitt, writing by Aleksandras Budrys, editing by Will Waterman)

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