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Chinese nuclear firm eyes $1.23 billion Kalahari bid
March 7, 2011 / 6:31 PM / 7 years ago

Chinese nuclear firm eyes $1.23 billion Kalahari bid

LONDON (Reuters) - Kalahari Minerals KAH.L is in talks about a possible 756 million pound ($1.23 billion) offer from a Chinese state-owned nuclear power producer seeking new sources of uranium.

London-listed Kalahari, which holds around 43 percent of Extract Resources EXT.AX EXT.TO, said on Monday a unit of China Guangdong Nuclear Power Holding Corporation (CGNPC) had proposed a possible offer of 290 pence per share.

Although both companies said there was no certainty CGNPC would make a formal offer, Kalahari said it would recommend to its shareholders a formal offer, if made on the proposed terms.

CGNPC’s possible offer represented an 11 percent premium to Kalahari’s closing price on Friday. “The Kalahari board believes this represents attractive value for Kalahari shareholders,” its executive chairman Mark Hohnen said.

Kalahari closed up 9.5 percent at 284.6 pence, after a high at 293.5 pence.

Kalahari also said it was also in talks to simplify its shareholder structure with Extract, in a bid to combine assets with Rio Tinto (RIO.AX) (RIO.L) in Namibia.

The company wants to combine Extract’s Husab Uranium Project with the neighboring Rossing Uranium mine owned by Rio Tinto.

Kalahari said CGNPC has established strong relationships with domestic and overseas manufacturers and suppliers of natural uranium.

“The Kalahari board believes this preeminent position in the uranium sector makes CGNPC a suitable partner for the realization of the full potential of the Husab Uranium Project to the benefit of all stakeholders,” Hohnen said.

Extract’s chairman had told Reuters in February the company had no intention of selling its Husab uranium deposit, the largest of its kind in the world.

Analysts have long said Extract could be an eventual target for Rio, whose Rossing mine is near Extract’s Husab deposit.

Speculation was renewed last month week when the two companies said they were in talks to combine their uranium projects.

Reporting by Lorraine Turner and James Davey; Editing by Rhys Jones

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