Australian Financial Review Online: 09 Mar 2011 12:31:16 Angela Macdonald-Smith
In-play uranium explorer Extract Resources has signalled that it would seek to force China Guangdong Nuclear Power into making a full bid for the company after the Chinese firm on Tuesday announced its plan to bid for Extract's biggest shareholder Kalahari Minerals.
Extract said in a statement on Tuesday that it would oppose China Guangdong Nuclear's application to Australian regulators for an exemption to the provision that would require it to make a complete takeover offer for Extract if it acquired an interest of more than 20 per cent of the company. Kalahari owns about 43 per cent of Extract, owner of one of the world's biggest uranium resources, the Husab deposit in Namibia.
Rio Tlnto owns 14.7 per cent of Extract and 11.5 per cent of Kalahari and some analysts expect the China Guangdong bid to trigger a move by Rio on either company. Rio has been focusing on ways to access the Husab resource through a deal with Extract to process ore from the deposit through its neighbouring Rossing mine, without bidding for control of Extract.
In its statement on Tuesday, Extract said it would lobby the Australian Securities and Investments Commission only to grant relief to China Guangdong from the 20 per cent takeover provision "if all Extract shareholders are not disadvantaged in any way, and that all Extract shareholders are afforded the opportunity to have the effective benefit" of China Guangdong Nuclear's offer on no less than equivalent terms to those offered to Kalahari".
Otherwise, it would ask ASIC not to grant the exemption, Extract said.
Extract said its independent directors would keep shareholders informed of any proposal or offer for the company.
China Guangdong Nuclear has signalled it would only firm up its planned �756 million ($1.2 billion) bid for Kalahari if it gets the ASIC exemption.
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