Thursday, March 1, 2012

Extract Resources Directors Back $2.38bn Chinese Takeover Bid

Published on Thursday March 01 2012 (AEST)

The independent directors of Extract Resources, owner of one of the world's largest uranium mines, have backed a takeover offer from China Guangdong Nuclear Power Corp (CGNPC) that values it at A$2.2 billion ($2.38 billion).

The recommendation for the A$8.65 a share offer, was made after Extract failed to uncover any rival bidders and takes CGNPC a step closer to winning control of the giant Husab uranium project in Namibia.

"After a lengthy and exhaustive process, as at today, no alternative and superior proposal has been received, nor are there any discussions underway with third parties," Extract said in a statement.

In a complex deal, CGNPC -- which is bidding with the China-Africa Development Fund -- initially offered $990 million for Kalahari Minerals, which owns 42.7 percent of Extract. It launched a bid for Extract last month after winning control of Kalahari.

Rio Tinto, which owns a 14 percent stake in Extract, had no immediate comment on whether it would accept the offer. The gobal miner had previously accepted the Chinese offer for a stake it held in Kalahari.

Husab is potentially the second-largest uranium mine in the world, and Rio Tinto has been in talks with Extract to combine its neighbouring Rossing mine, the world's longest-running open pit uranium mine, with Husab.

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