ok, what the heck is going on?, page-10

Paladin Energy halt; uranium soars on takeover
George Lekakis
September 10, 2009 12:00am


URANIUM stocks soared yesterday amid strong speculation that a bidding war was set to erupt for control of Perth-based junior explorer, Energy Metals.

The country's third-largest uranium miner, Paladin Energy, was placed in a trading halt before the market opened after the company's managing director John Borshoff announced a $450 million capital raising to fund acquisitions and mine expansions.

Energy Metals' board announced on Monday it had entered a deal to sell 70 per cent of the company to China Guangdong Nuclear Corporation for about $80 million.

But the Paladin disclosure sparked a rally in Energy Metals' share price and a host of uranium explorers, which are now being eyed by Chinese and Japanese nuclear power companies.

Energy Metals soared as much as 20 per cent in early trading, but closed up 12c, or 12.5 per cent, at $1.08.

That means the stock is now trading at a hefty premium to the CGNC takeover offer of $1.02 a share.

A string of other junior explorers rallied even harder, with Toro Energy closing up 27 per cent at 23.5c and Deep Yellow up 18 per cent at 36.5c.

Turnover in Toro was more than four times the daily average.

Paladin is already the largest shareholder on the Deep Yellow register with a 20 per cent interest.

Global uranium demand is set to double over the next seven years as a swath of new generation nuclear power plants enter production

CGNC is one of China's largest nuclear power producers and is looking to secure long-term supplies of uranium for four new power plants it has under construction.

Paladin's move to boost its war chest may be viewed as the first step to mounting a counter-bid for Energy Metals.