MELBOURNE Extract Resources EXT.AX plans to ask Australia's securities watchdog to force China Guangdong Nuclear Power Holding Corp to make a bid for the company if CGNP goes ahead with a takeover of Extract's top shareholder, Kalahari Minerals KAH.L.
Extract's shares jumped 7 percent on Wednesday to A$10.65, valuing it at $2.7 billion and adding to a 7 percent rise on Tuesday on talk that the Chinese state-owned company's bid for Kalahari would put Extract in play.
Extract is 43 percent owned by Kalahari. If the CGNP took over Kalahari, it would own more than 20 percent of Extract, the threshold at which Australian rules would normally require it to make a takeover offer for Extract.
However, there is an exemption when the stake is acquired through a takeover of a company that owns more than 20 percent of an Australian firm and is listed on one of several exchanges, including the London Stock Exchange.
CGNP said on Monday it would ask the Australian Securities and Investments Commission (ASIC) to exempt it from making a follow-up bid for Extract.
Extract said to protect all its shareholders, it would ask the commission to grant that relief to CGNP on condition that "all Extract shareholders are not disadvantaged in any way" or else not grant the relief.
If the exemption is not granted, the Chinese company would be required to make a matching takeover offer for Extract Resources.
In a similar case last year, the commission refused to force Spanish construction group ACS (ACS.MC) to buyout the minorities in contractor Leighton Holdings LEI.AX as part of ACS's bid for Leighton's German parent, Hochtief AG (HOTG.DE).
Extract Resources declined to comment further on its planned submission to the commission.
(Reporting by Sonali Paul; Editing by Ed Davies)