KATE EMERY, The West Australian August 11, 2011, 6:56 am
Extract Resources may again find itself in the corporate crosshairs after China's CGNPC Uranium was last night cleared to resume takeover talks with its biggest shareholder for a slice of what is arguably the most strategic uranium deposit in the world.If CGNPC does launch an offer for London-listed Kalahari Minerals, which owns 42.8 per cent of Extract, Australia's corporate regulator could force it to launch a bid for Extract as well.
A move by CGNPC may also force the hand of other would-be suitors, rumoured to include Rio Tinto.
Gaius King, an analyst with London-based WHI Securities, said Extract would be a "very attractive takeover target for an integrated nuclear conglomerate".
"Despite claims to the contrary following the natural disaster at Fukushima, we do not subscribe to the theory that the sun is about to set on the nuclear industry," Mr King said in a note to clients.
"We predict that over the coming decades many Western nationals . . . will rescind recent populist comments and embark on a major civilian nuclear power replacement program.
"It is in this context that the investor should view its (Extract's) Husab uranium project, arguably the most important uranium discovery of the past three decades."
CGNPC and Kalahari Minerals were close to a GBP756 million ($1.2 billion) friendly deal in March before Japan's Fukushima nuclear disaster prompted the Chinese group to cut the price of its offer.
However, under British takeover law, CGNPC had to wait three months before it could table a new offer. That deadline expired last night, leaving the parties free to talk from today.
Extract shares are down about 20 per cent since CGNPC went public with its approach to Kalahari. They closed 49c higher at $7.20 yesterday.
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