Offer does not reflect Summit’s short, medium and long-term upside Board believes more upside in Summit than Paladin Offer timed to beat anticipated change of ALP no new mines policy Also timed to beat possible court loss over Mount Isa Uranium Joint Venture Non-Australian/NZ shareholders being asked to sell for cash Capital gains tax liability for Summit shareholders who accept The Summit Resources board has today recommended that shareholders reject Paladin’s opportunistic and inadequate takeover offer.
Summit Managing Director Alan Eggers said the Summit board believes Paladin’s all-scrip offer of one Paladin share for 2.04 Summit shares does not reflect the value of Summit’s uranium, base metal and iron ore projects and extensive tenement holdings in Queensland. “Paladin’s understanding of the value of Summit has clearly increased through its participation in the Isa Uranium Joint Venture,” he said. “We believe Paladin now recognises the inherent value of the Mount Isa Uranium province, which is one of the most prospective uranium provinces in the world today.
“Paladin’s offer has been timed to close just two weeks before the Australian Labor Party is anticipated to change its ‘no new mines’ policy. The potential removal of this impediment has very positive implications for Summit and it would be premature for our shareholders to accept Paladin’s offer in this environment.” Mr Eggers said the offer from Paladin was not unexpected and that Summit’s directors believe Paladin launched its hostile offer without any prior discussion because it knew that its terms would be regarded as inadequate. “The fact that the offer is not subject to any minimum level of acceptance is a clear sign of how desperate they are to use their currently highly priced shares to acquire as many Summit shares as possible before Summit appreciates further in value,” he said. “We control and manage very high quality assets and we intend to build a world-class mining, treatment and metal recovery project at Mount Isa,” he said. “It’s obvious Paladin recognises this and has timed its opportunistic offer to maximise returns for its own shareholders before we can unlock this value for our shareholders”. “If Paladin wants to take control of Summit it will have to pay a price which adequately reflects the underlying value of Summit. “This opportunistic and inadequate scrip-only offer does not.”
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