http://www.bloomberg.com/apps/news?pid=20601081&sid=ad6JcbYdnfAM&...

http://www.bloomberg.com/apps/news?pid=20601081&sid=ad6JcbYdnfAM&refer=australia


Areva Acquires 10% Stake in Summit, Says It Won't Bid (Update5)
By Joyce Moullakis and Gavin Evans

April 26 (Bloomberg) -- Areva SA, the world's largest maker of nuclear power stations, acquired a 10.46 percent stake in Summit Resources Ltd., allowing it to prevent a full takeover of the Australian uranium explorer by Paladin Resources Ltd.

Areva paid A$6.10 a share for the stake in Summit, the Paris-based company said in a statement today. It has ``no current intention'' of making a full bid for the Perth-based company, according to the statement.

Summit last week accepted a A$1.18 billion ($982 million) takeover offer from Paladin, its partner in the Valhalla uranium deposit near Mount Isa in Australia's Queensland state. Earlier plans to sell Areva a stake in the company as part of a plan to help develop the resource won't proceed, Summit said April 23.

``With more than 10 percent, even if Paladin is successful, Areva will have a seat at the table,'' said Gavin Wendt, a senior resources analyst at Fat Prophets Funds Management in Sydney. ``It gives them significant bargaining power. They would like the marketing rights of the uranium.''

Summit shares rose 35 cents, or 6.3 percent, to A$5.95 in Sydney. Paladin shares rose 41 cents, or 4.3 percent, to A$10.

Paladin is offering one of its shares for every 1.67 Summit shares held. Paladin's offer vales Summit's shares at A$5.99 each, based on today's closing prices.

``We are protecting our position with this action,'' Philippe Portella, managing director of the company's Australian unit, said in a telephone interview. Areva wanted to contribute to talks between Summit and Paladin and continues to be interested in pursuing a strategic alliance with Summit, he said.

Blocking Stake

Areva's stake is enough to block Paladin proceeding with a compulsory acquisition of Summit were it to win the support of the rest of the company's shareholders.

Perth-based Summit today reiterated its advice that shareholders accept the Paladin offer. It said in a statement that Areva's purchase is ``consistent'' with Summit's prior talks with the French company.

Uranium prices have more than doubled in the past year, spurred by rising demand from utilities for power generation, production losses at existing mines and delays to new projects.

Australia's Labor Party, which controls the country's state governments, will review its 25-year-old ban on the opening of new uranium mines at a three-day conference starting April 27. An end to the prohibition will clear the way for the Mount Isa deposit to be developed by 2012, Paladin said last month.

To contact the reporters on this story: Joyce Moullakis in Sydney at [email protected] ; Gavin Evans in Wellington at [email protected]

Last Updated: April 26, 2007 03:21 EDT