The takeover threat to OAO GAZ by Siberian Aluminium (Sibal) gained legitimacy November 17, when the automaker's president Nikolai Pugin met Sibal head Oleg Deripaska, sources told

No details were available, but the meeting is believed to be the first face-to-face exchange between the executives, since rumours of Sibal's plans to buy GAZ began in August.

The metals group had denied any interest in the automaker categorically and repeatedly - even early last week. But, in an about-face November 15, Sibal said it held a critical stake of 25% plus one share in GAZ, adding it planned to acquire "absolute control" of GAZ.

Immediately following Sibal's disclosure, a source close to the automaker retorted that the metals group was bluffing - exaggerating its holding to intimidate GAZ stakeholders to sell their shares in desperation to Sibal. "I am less convinced of the bluffing theory now," the source said this weekend.

GAZ, whose name in Russian is Gorkovsky Avtomobilny Zavod, is the second-largest producer of vehicles in the ex-USSR, behind Lada-maker AO AvtoVAZ. Its foreign partners include European Bank for Reconstruction and Development plus Fiat Auto SpA. GAZ is based 400km east of Moscow in Nizhny Novgorod, Russia's third-largest city (re-named Gorky 1932-1991).

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