China Guangdong Nuclear Power Group Co., the nation’s second-largest reactor builder, made a 756 million-pound ($1.2 billion) bid for Kalahari Minerals Plc (KAH) as the Chinese government seeks uranium to boost atomic generation.
The proposed acquisition would give the state-owned company access to Extract Resources Ltd. (EXT)’s Husab uranium project in Namibia. Kalahari owns about 43 percent of Australia’s Extract, which calls its venture the fifth-biggest uranium deposit.
“This would give them a foothold in one of the largest uranium assets in the world and supply their plans to significantly grow their reactor fleet,” Simon Tonkin, an analyst at Patersons Securities Ltd. in Perth, said today. Rio Tinto Group, a shareholder in Kalahari and Extract, may seek to block the offer or make a counter bid, according to Tonkin. Bruce Tobin, a Rio spokesman in Melbourne, didn’t return a telephone call seeking comment.
China Guangdong made a “possible offer” of 290 pence a share, 11 percent above Kalahari’s March 4 close, it said in a statement yesterday. Kalahari rose 9.5 percent to a record 285 pence in London trading after earlier saying it was in talks with an unidentified third party. The acquisition by China Guangdong would be the second-biggest Chinese takeover of a foreign mining company, according to Bloomberg data.
Extract gained as much as 8 percent to A$10 in Sydney after the announcement, the biggest gain since Oct. 15, compared with a drop of 0.2 percent for the S&P/ASX 200 Index. The shares traded at A$9.88, up 6.7 percent, at 11:30 a.m. local time.
Extract’s directors will “consider the implications” of the proposed bid, the company said in a statement today to the Australian stock exchange. Extract said it recommends shareholders take “no action” and await advice from the board.
‘Attractive Value’
“The Kalahari board believes this represents attractive value for Kalahari shareholders,” Mark Hohnen, chairman of the London-based company, said in the China Guangdong statement. Kalahari will recommend the proposal to its stockholders, according to the Chinese company.
China may raise its 2020 target for atomic power generation to 86 gigawatts, with annual investment of 70 billion yuan ($10.7 billion), the state-run China Daily said Jan. 26. In comparison, capacity may total 11.7 gigawatts by the end of 2011, the National Energy Administration said.
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