The Directors of Berkeley Resources Ltd advise that it has been approached by and is presently in discussions with, OAO Severstal one of the world's leading integrated steel and mining companies, to agree the basis on which Severstal may make a proposal to acquire control of the Company.
Severstal has indicated to the company that, subject to Severstal completing and being satisfied with the results of financial, technical and legal due diligence and the entry into an implementation agreement which is on terms satisfactory to the Company and Severstal, it would consider making a conditional all cash proposal for all of the outstanding shares of Berkeley.
Berkeley has entered into a Subscription Rights Deed with Severstal whereby it has granted Severstal the right to subscribe for approximately 16.3 million new Berkeley shares at a price of AUD 1.70 per share, subject to the condition that Severstal publicly announces an intention to proceed with a takeover bid for the Company at a price of AUD 2.00 per share. The shares that may be issued to Severstal pursuant to the Subscription Rights Deed would represent approximately 9.1% of the fully diluted share capital of Berkeley.
Severstal right to subscribe for shares in Berkeley will expire on 10 December 2010, unless it has announced an intention to proceed with such a takeover bid on or before that date. A summary of the key terms of the Subscription Rights Deed is contained in Annexure A to this announcement.
In the event that Severstal publicly announces a takeover bid for the Company at a price of AUD 2.00 per share, Berkeley Directors would unanimously recommend that shareholders accept that offer in the absence of a superior competing proposal. An offer price of AUD 2.00 per share would represent a premium of approximately 40% to the volume weighted average price of Berkeley shares traded on the ASX in the three months from July 29th 2010 to October 28th 2010 of AUD 1.43.
At an exchange rate of 1.63 the offer price of AUD 2.00 per share would amount to an offer price of approximately EUR 1.23 per share.
Berkeley Salamanca Uranium Project has the potential to be a leading uranium project and is scheduled to commence mining by late 2012.
