Sit tight at Kalahari
Created:
8 March 2011
Written by:
Martin Li
Uranium investor Kalahari Minerals is in discussions with CGNPC-Uranium Resources, a subsidiary of state-owned China Guangdong Nuclear Power, over a possible cash offer for Kalahari at 290p, which would value Kalahari at some ?756m. However, this doesn't look like a knock-out bid and the most natural acquirer of the company's assets has yet to make a move - so hold on for now.
At the heart of the Chinese interest lies the world-class Husab uranium deposit in Namibia, which is owned by Extract Resources, in which Kalahari holds a 43 per cent interest. Each member of the Kalahari board has provided an irrevocable undertaking to accept the offer should it be made, subject to there being no competing offer priced five per cent higher.
The latest talks come just two weeks after Kalahari revealed it was in talks with Extract over simplifying the ownership structure of Husab, and that Extract was talking to Rio Tinto over potentially combining Husab with Rio's neighbouring Rossing mine. Indeed, Rio's omission is the most striking feature of the announcement.
What we said: Buy
Add to My Watchlist
What is My Watchlist?
