Reuters reported that the battle for a major undeveloped uranium deposit in Canada intensified on Thursday when Anglo and Australian mining giant Rio Tinto raised its friendly takeover offer for Hathor Exploration to about CAD 654 million.
The CAD 4.70 per share offer leapfrogged a revised hostile bid for Hathor from Canada's largest uranium producer, Cameco Corporation. And it may well prolong an already protracted battle to buy the Canadian uranium explorer as Rio and Cameco bet global demand for uranium will grow despite the pressure the nuclear power sector is under after the Fukushima disaster in Japan.
The sweetened offer tops a revised bid of CAD 4.50 per share that Cameco put forward earlier this week and it is more than 25% higher than Cameco's first offer of CAD 3.75 per share made in late August.
Investors are gambling that the bidding isn't over yet. Shares of Hathor, which owns the Roughrider uranium project in Canada's uranium rich province of Saskatchewan, closed 2.9% higher at CAD 5.01 on the Toronto Stock Exchange following Rio's new bid.
The market had already factored in a sweetened offer from Rio given that the two companies have been in talks for more than a year. And Hathor's shares have consistently traded at a premium to Cameco's revised offer this week.
Several analysts, however were less than certain that Cameco will be lured deeper into a bidding war to get Roughrider which is located just 25 kilometers southeast of Cameco's Rabbit Lake mine and mill has the potential to produce at least 5 million pounds a year.
Mr David Talbot analyst of Dundee Capital Markets said that he believes Cameco may consider sweetening its bid but given its history of being disciplined the chances of this are diminished. While we believe there are strategic reasons for Cameco to up the ante, the economic reasons, at least based on what we know of the deposit are decreasing."
Rio said that Hathor's board of directors supports the revised offer and it has advised its shareholders to tender shares to it. Rio's lock up agreements with Hathor directors and senior officers remain in effect.
(Sourced from Reuters)
