Extract Resources Awaits Bid From Chinese Suitors
03 February 2012 - 10:41AM
Dow Jones News
Trading in Australia's Extract Resources Ltd. (EXT.AU) has been
halted Friday while the company, which owns one of the world's
biggest deposits of uranium, awaits a likely bid from China
Guangdong Nuclear Power Corp. that would value it at almost A$2.2
billion (US$2.4 billion).
The Australian bourse said trading will be suspended until
either Tuesday or an announcement is released to the market.
The halt was requested by Extract "in anticipation of an
announcement from Taurus," the bid vehicle of China Guangdong and
China-Africa Development Fund, the mining company said.
The Chinese nuclear fuels supplier and its partner have bid
GBP632 million (US$999 million) for London-listed Kalahari Minerals
PLC (KAH.LN), whose main asset is a nearly 43% interest in Extract.
The Chinese companies have said they would abide by Australian
takeover rules, which require the bid to be extended to Extract's
shareholders within four weeks of them securing more than 50% of
parent Kalahari.
At stake is Extract's Husab uranium project in Namibia, which
promises to become one the world's largest uranium mines and
neighbors Rio Tinto PLC's (RIO) operating Rossing uranium mine.
Mining and power companies are seeking out uranium supplies to meet
an expected rise in demand from China, India and other countries
with plans to build fleets of nuclear power stations.
China Guangdong's and CAD Fund's offer for Kalahari of 243.55
pence in cash was due to close Thursday. Rio earlier this week said
it would sell its roughly 11.1% stake in Kalahari to the Chinese
companies, and would in time consider what to do with an about
14.2% stake in Extract.
Rio and Extract a year ago said they had discussed a possible
combination of Rossing mine and Husab project. Extract more
recently said its board would only give its recommendation on the
pending takeover offer after the bid is made, and in the meantime
was continuing to look for alternatives and was negotiating with
potential investors in Husab.
China Guangdong and CAD Fund have said they plan to offer A$8.65
a share for Extract, dependent on their acquiring a more than 50%
stake in Kalahari.
Extract's shares last traded at A$8.57, giving it a market
capitalization of A$2.15 billion.
-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094;
robb.stewart@dowjones.com
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