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http://www.businessweek.com/news/2011-12-08/extract-studies-options-as-2-2-billion-china-takeover-looms.html

Extract Studies Options as $2.2 Billion China Takeover Looms

December 08, 2011, 10:49 PM EST
By Jesse Riseborough

Dec. 9 (Bloomberg) -- Extract Resources Ltd., owner of the world’s fourth-largest uranium deposit, is studying its options as a A$2.2 billion ($2.2 billion) takeover bid from China looms following a deal to buy its biggest shareholder.

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Extract’s independent directors “are working carefully to assess the details of the proposed offer and will consider all available alternatives for maximizing shareholder value,” Jonathan Leslie, chief executive officer, said in an e-mailed statement. The bid “clearly demonstrates the strategic nature of Husab as a tier-one asset as well as confidence in the long- term fundamentals of the uranium industry.”

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“It’s difficult to see anyone else coming in to counter bid for Kalahari given the friendly nature of the offer and the relatively tightly held shareholder base of Extract and Kalahari combined,” Edward Sterck, a London-based analyst at BMO who has a “market perform” rating on Extract, said by phone.

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“Rio Tinto is unlikely to come in with a direct counter bid to Guangdong Nuclear because they may be expecting to be part of development plans anyway,” Sterck said. Rio owns 14 percent of Extract and 11.5 percent of Kalahari, according to data calculated by Bloomberg. “Kalahari shareholders will probably view the offer favorably given broader market conditions.”

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The acquisition would be the second-biggest Chinese takeover of a foreign mining company, according to data compiled by Bloomberg. The nation began its first commercial nuclear plant in 1994 and now has the highest number of atomic facilities being built, figures from the World Nuclear Association show.

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