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http://au.news.yahoo.com/thewest/business/a/-/wa/12151592/extract-may-sell-10pc-husab-stake-to-namibia/

Kate Emery, The West Australian November 29, 2011, 8:40 am

Extract may sell 10pc Husab stake to Namibia

Extract Resources is in talks to sell the Namibian Government a 10 per cent stake in its Husab uranium deposit, while China continues to circle the one-time Perth-based company and its biggest shareholder, London-listed Kalahari Minerals.

A little over a week out from a December 8 deadline for China Guangdong Nuclear Power Company to commit to a proposed £2.4355-a-share bid for Kalahari that could see it launch a $2 billion-plus downstream bid for Extract, both Extract and China are in talks with Namibia's state-owned Epangelo Mining Company.

Extract today confirmed Namibian media reports that CGNPC was in talks with Epangelo about the later taking a 10 per cent stake in Husab. However, it pointed out that any deal between CGNPC and Epangelo would only come about if CGNPC had already taken control of Husab, which would mean acquiring both Kalahari and Extract.

At the same time Extract is in talks with Epangelo about selling the group a 10 per cent stake in Husab "on commercial terms" regardless of what happens with CGNPC.

Under Australian rules, if CGNPC bids for Kalahari it will also be forced to bid for Extract on similar terms because it would breach the 19.9 per cent takeover threshold. Kalahari's stake in Extract is by far its biggest asset.

However, the corporate regulator does have the right to make an exception.

With Kalahari owning 42.7 per cent of Extract, the terms of its proposed offer would value Extract at between $8.80 and $8.90 a share. Extract shares were 8¢ higher in early trade at $7.91.

Rio Tinto, which holds stakes in both Kalahari and Extract, remains the wildcard in the Extract saga. Having launched a $C578 million offer for Canadian uranium player Hathor Exploration last month, it is unclear whether the mining giant would consider a counter bid for Extract and Kalahari.

Ends.


Whats everyones thoughts, is Husab too big and too strategic for Rio to counter bid?