The takeover bid for Namibia-focused uranium firm Kalahari Minerals (LON:KAH) will soon be back on, according to Ambrian Partners analyst Duncan Hughes, now that three months have elapsed since the UK Takeover Panel forbade Chinese firm CGNPC-URC from reducing its 290 pence per share offer for Kalahari to 270 pence per share.
On May 10 the Takeover Panel ruled that China Guangdong Nuclear Power Group - Uranium Resources Co. would not be permitted to announce an offer for Kalahari for a price of less than 290 pence per share for three months. At the time, Proactive Investors reported that Rio Tinto, which owns the neighbouring Rossing uranium mine, could also be a rival suitor for Kalahari.
Ambrian's Hughes now believes that an offer of 270 pence per share could be imminent. "I think that something will have to happen here," he told Proactive Investors. "If not CGNPC, then it will be Rio."
An important signal for a renewed takeover attempt could be CGNPC's announcement this week that it is issuing around GBP283 million in short-term bonds, with a maturity of 366 days, on the interbank market, although it said that the proceeds will be used to "replenish the firm's working capital and repay loans".
270 pence per share is the likely offer since that was the price that, effectively, had been agreed previously, added Hughes.
A key reason why the Chinese firm wanted to revise its original price, which valued Kalahari at GBP756 million, was because of the meltdown in global uranium equities in the wake of the Fukushima nuclear disaster that followed Japan's massive earthquake and tsunami in March.
Kalahari has a major stake in the Husab Uranium Project in Namibia via its 42.8 per cent stake in Extract Resources (ASX:EXT, TSE:EXT). Rio's nearby Rossing uranium mine has produced more than 260 million pounds of uranium since 1976.
Yesterday, Extract reported a 37 per cent increase in reserves, and a 42 per cent increase in contain uranium, at Husab. The firm's executive chairman commented that "the scale and economics of the Husab Uranium Project continue to underpin the fantastic potential for the development of the world's largest and most significant long life uranium mines".
Ambrian, Kalahari's house broker, noted the 37 per cent increase in reserves that extends the mine life for Zones 1 and 2 to more than 20 years and the increase in ore grade from 497 parts per million to 518ppm, as well as a maiden declaration of proven reserves equivalent to four years of full production.
The broker commented: "These exceptional results continue to emphasise that the Husab Uranium Project is a world-class mineral asset. The project now has over 20 years of mine life defined. We are confident that the project will continue to grow, and point out that the reserve is just from Zones 1 and 2 at Husab."
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