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Nov. 17 (Bloomberg) -- Rio Tinto Group, the world’s third- largest mining company, raised its agreed offer for Canadian uranium miner Hathor Exploration Ltd. to about C$654 million ($637 million) to fend off Cameco Corp.’s hostile bid.
Rio will pay C$4.70 a share, up from its previous C$4.15 offer, the London-based company said today in a statement. That’s 4.4 percent more than Cameco’s C$4.50-a-share bid and represents a 76 percent premium to Hathor’s closing share price on Aug. 25, the day before Cameco made its initial offer.
Acquiring Vancouver-based Hathor would give Rio, which mines uranium in Australia and Namibia, control of the Roughrider deposit in northern Saskatchewan’s Athabasca Basin. Roughrider may contain about 78 million pounds (35.4 million kilograms) of the nuclear-reactor fuel, Bart Jaworski, an analyst at Raymond James in Vancouver, said in an Oct. 19 note.
Hathor, whose board unanimously recommended investors accept London-based Rio’s bid, estimates the proposed Roughrider mine, mill and facilities will cost C$567 million.
That sum “significantly underestimates the costs, timelines, and risks associated with development of the Roughrider deposit and so, by inference, significantly overstates the value of the Roughrider deposit and Hathor as a company,” Cameco Chief Executive Officer Tim Gitzel said in a Sept. 14 statement.
The Hathor deal would be Cameco’s largest acquisition if successful, according to data compiled by Bloomberg. The offer from Cameco, which is the world’s largest uranium producer, expires at 12:01 a.m. Vancouver time on Nov. 29.
--Editors: Simon Casey, Charles Siler
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