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Chinese nuclear power giant tables "conditional" ?756 million bid for Kalahari

Kalahari Minerals (LON:KAH) said this evening it will back a ?756 million conditional takeover bid by a subsidiary of China Guangdong Nuclear Power once the offer is formally lodged.

The 290 pence a share offer by CGNPC-URC was revealed just hours after Kalahari confirmed it was in talks with an unnamed third party.

The deal will go ahead only once the Chinese have received regulatory clearance in People?s Republic and Australia and has secured the necessary financing.

However, matters are complicated slightly by the involvement of industry super-major Rio Tinto (LON:RIO) as Kalahari shareholder.

It has an 11.5 per cent stake in Kalahari and is also in talks with Extract Resources to merge its R?ssing Uranium Mine in Namibia with the Husub Project owned Extract Resources. Kalahari owns 43 per cent of Extract.

All off which has led to fevered speculation about a potential bidding war between Rio and the Chinese.

However the Kalahari board said once a formal offer is lodged then it will recommend the takeover.

CGNPC's managing director Zhiping Yu added: ?We are delighted to have secured the support of the Kalahari board, as we believe this highlights both the attractive value of the possible offer and CGNPC-URC's status as an excellent partner for the future development of the Husab Uranium Project.?

The bid terms represent an 11.6 per cent premium to the Kalahari share price last Friday and 38 per cent premium to the average price over the last six months.

The putative bidder has received irrevocable undertakings to back the deal from investors representing 7.3 per cent of the shares.

Kalahari?s executive chairman Mark Hohnen said: ?The Kalahari board has considered the possible offer from CGNPC-URC carefully in the context of other opportunities available to Kalahari and the Kalahari board believes this represents attractive value for Kalahari shareholders.

?If made, the possible offer would enable Kalahari shareholders to crystallise this value now, in cash.

?CGNPC-URC's core business activities are centred on the management and supply of nuclear fuels for its parent, CGNPC, establishing interests in and supporting the development of commercial resources and reserves of natural uranium.

?The Kalahari board believes this pre-eminent position in the uranium sector makes CGNPC-URC a suitable partner for the realisation of the full potential of the Husab Uranium Project to the benefit of all stakeholders.?