China Guangdong Nuclear Power Holding Co. has walked away from a US$1.24 billion deal for Kalahari Minerals PLC (KAH.LN), a move that could flush out other suitors caught blindsided by China's largest uranium bid to date.

CGNPC, one of China's two largest nuclear power generators and owner of the huge Daya Bay reactor complex near Hong Kong, withdrew its offer for Kalahari after the U.K. Takeover Panel ruled it couldn't cut the bid price despite global uncertainty over the immediate future for atomic energy.

Kalahari's main asset is a near-43% stake in Extract Resources Ltd. (EXT.AU), which is developing the US$1.48 billion Husab project in Namibia, one of the world's largest untapped uranium deposits. Extract's shares fell on the news that CGNPC was dropping its bid, trading 30 cents lower, or 4%, at A$7.40 at 0300 GMT.

CGNPC had offered 290 pence a share for Kalahari, valuing the London-listed company at GBP756 million just days before a devastating earthquake hit northeast Japan on March 11, crippling several reactors and prompting fresh scrutiny of the safety of nuclear power that weighed heavily on the share prices of uranium miners.

Late Tuesday, CGNPC said it had abandoned its recommended cash offer after the Takeover Panel earlier in the day rejected its appeal to renegotiate the deal at a lower price of 270 pence a share.

In a statement, the regulator said it would publish its reasons for the ruling in due course, adding the announcement of the takeover offer hadn't contained a clause allowing CGNPC the right to lower the bid price.

China, which doesn't have sufficient uranium reserves of its own, is in the midst of a major expansion of nuclear power to reduce its reliance on coal. CGNPC had sought to acquire Kalahari and with it control of Extract.

Extract's Husab project is located a few kilometers from the operating Rossing uranium mine of London-based Rio Tinto PLC (RIO).

Rio owns a 14% stake in Extract and 11.5% interest in Kalahari. Perth-based Extract and Rio Tinto have been in discussions to possibly combine Husab and Rossing.

Further complicating CGNPC's acquisition of Kalahari was the possibility it would also have to launch an offer for Extract. It had been awaiting for a decision from the Australian Securities and Investments Commission on an application to be exempted from regulations that require any company gaining a greater than 20% shareholding to make a takeover offer.

Extract separately said Wednesday it is pushing ahead with Husab's development as well as conducting exploration drilling, and is also continuing to evaluate development and partnership options for the uranium project.

Mining executives continue to expect rising demand for uranium as countries develop nuclear energy programs. Jacques Nasser, chairman of mining giant BHP Billiton Ltd. (BHP), last week told an industry event in Melbourne he expected nuclear power to form part of the global energy mix needed to meet rapidly rising demand for electricity.

China has 13 operational civil nuclear reactors, including five owned by CGNPC, and has another 27 under construction. In 2010, China's uranium imports tripled to 17,136 metric tons.

-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; robb.stewart@dowjones.com

-Razak Musah Baba in London contributed to this article

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