Bloomberg News

Extract Says Potential China Takeover Gets Namibia Approval

January 12, 2012

(Updates with closing share price in fourth paragraph.)

Jan. 11 (Bloomberg) -- Extract Resources Ltd., owner of the world’s fourth-largest uranium deposit, said Namibia approved a potential acquisition of the company should a Chinese bid for its biggest shareholder Kalahari Minerals Plc succeed.

The Namibian Competition Commission has endorsed the proposed acquisition by China Guangdong Nuclear Power Group Co., and Extract’s directors “are continuing to review all available opportunities to maximize shareholder value,” the uranium explorer said in a statement today. The regulator’s approval is one condition of the takeover proposal to Kalahari shareholders.

China is pursuing new sources of the fuel to feed rising demand for atomic power in the world’s second-largest economy. Kalahari, whose directors recommended the Chinese bid announced last month, owns 43 percent of Extract. Guangdong Nuclear said today the Kalahari stake pledged to it by the company’s directors is now 3.7 percent, up from 2.2 percent after Chairman Mark Hohnen exercised options over 4 million shares.

Extract, developer of the Husab uranium deposit in Namibia, was unchanged at A$8.49 at the close of trade in Sydney, valuing the Perth-based company at about A$2.1 billion ($2.2 billion). Guangdong Nuclear has agreed to buy Kalahari for 243.55 pence a share. The stock gained 0.4 percent to 243 pence by the close in London.

Rio Tinto Stake

Australian regulators have ruled that Guangdong Nuclear must offer A$8.65 a share for Extract should the Chinese state- owned company’s 632 million-pound ($969 million) offer for London-based Kalahari succeed.

Rio Tinto Group, the world’s third-biggest mining company and owner of the Rossing mine near Husab, holds a 14 percent stake in Extract and an 11.5 percent share in Kalahari, according to data compiled by Bloomberg.

The Rossing mine is the third-biggest producer of uranium, accounting for about 6 percent of global supply, data from the World Nuclear Association show. Husab is about 7 kilometers (4.4 miles) from Rossing and 30 kilometers from Paladin Energy Ltd.’s Langer Heinrich project.

--With assistance from Jesse Riseborough in London. Editors: John Viljoen, Amanda Jordan

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net


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