Kalahari agrees CGNPC buyout

12 December 2011

A major stake in one of the world's largest uranium projects has been secured by China Guangdong Nuclear Power Corporation (CGNPC) after an agreement on a cash buyout of Kalahari Minerals.

The 243.55 pence ($3.806) per share offer for Kalahari comes through Taurus Mineral, a newly incorporated company formed by CGNPC's subsidiary, CGNPC-URC, and Chinese equity investment fund the China-Africa Development Fund. It values the London-based firm at approximately £632 million ($989 million) and includes a condition of acceptances being received for more than 50% of shares on a fully diluted basis.

The announcement is the latest development in a sequence of events that started in March 2011, when CGNPC made offer of £756 million ($1.23 billion) for Kalahari. A few days later, after the onset of the Fukushima nuclear crisis, Kalahari and CGNPC-URC agreed on a lower offer price valuing Kalahari at £703 million ($1.14 billion). This was overruled by UK regulators and CGNPC subsequently withdrew the offer, although negotiations resumed later in the year.

Kalahari's key asset is its holding of 42.5% in Australian company Extract Resources, developer of the Husab uranium project in Namibia. The Australian Securities and Investments Commission (ASIC) has set a condition requiring Taurus to make a takeover bid for Extract if it succeeds in taking over more than 50% of Kalahari. ASIC has used a formula based on the offer price for Kalahari to set the price for any offer for Extract at A$8.65 ($8.72) per share.

CGNPC-URC managing director Yu Zhiping expressed delight at the agreement, saying that it also highlighted "CGNPC-URC's status as an excellent partner for the future development of the Husab Uranium Project."

Kalahari executive chairman Mark Hohnen echoed those sentiments, recognising the CGNPC-URC offer as attractive in the light of the "unexpected circumstances in Japan and their impact on uranium equities". He said that Kalahari's directors viewed CGNPC-URC as an "excellent partner for the realisation of the full potential of the Husab Uranium Project to the benefit of all stakeholders".

Researched and written

by World Nuclear News