Kalahari Minerals Share Discussion Threads

[red ninja] 12/10/2011 16:03

Copy of Gero post on hot copper.

It suggests that RIO will come in with the Chinese, presumably after Chinese have aquired Kalahari. Thus probably no bidding war between Chinese and RIO.


Majors move to Extract Kalahari value

The Australian Financial Review
PRINT EDITION: 12 Oct 2011
Angela Macdonald-Smith

Confirmation of China Guangdong Nuclear Power's new takeover interest in the largest shareholder of Extract Resources has refocused attention on the part Rio Tinto may play in the uranium explorer's large project in Namibia.

Any bid by the Chinese nuclear giant for London-listed Kalahari Minerals is expected to lead to a restructuring of ownership in the Husab project, now 100 per cent held by Extract.

That could bring Rio Tinto, a shareholder in both Extract and Kalahari, in as a shareholder in Husab, working alongside CGNPC, analysts said yesterday.

Such a deal could also see the joint development of the Husab deposit with Rio's adjacent Rossing mine, they said.

CGNPC's interest in Kalahari is part of a wrangling over control of Husab and for offtake from what is set to be one of the world's biggest uranium mines.

Japanese trading house Itochu also owns stakes in both Extract and Kalahari and is expected to want a share of output from the mine.

Kalahari, which owns 42.8 per cent of Extract, confirmed on Monday in London that it has resumed talks with CGNPC on a possible recommended takeover offer.

Any bid is expected to be priced no higher than 270 pence per share, the level the Chinese company had proposed to cut its earlier proposed offer to after the Fukushima nuclear accident in March.

Under Australian takeover regulations, the purchase of Kalahari by CGNPC would require the Chinese to make a follow-on bid for Extract at an equivalent price.

Extract yesterday said it had held talks with the Australian Securities and Investments Commission to ensure the interests of all its shareholders are protected should Kalahari be taken over.

That has been taken to mean that Extract is asking ASIC to force CGNPC to make a follow-on bid.

A 270p a share offer for Kalahari, valuing the company at about £650 million, equates to an offer of about $9.50 per share, or $2.4 billion, for Extract, CLSA calculates.

But a takeover of Kalahari is expected to lead to a more extensive restructuring of interests rather than just a follow-on bid for Extract.

"The simple case is that the Chinese just buy Kalahari and use that to buy Extract, but I wouldn't rule out some sort of engagement by Rio," CLSA analyst Michael Evans said. "I think some co-operation between CGNPC and Rio Tinto is highly likely; it would be a win-win."

Merrill Lynch analyst Glen Chipman said the most likely outcome could be an equity swap that would allow Rio to increase its stake in Husab in exchange for helping fund the project.

"Husab is crucial for Rio Tinto maintaining meaningful low-risk uranium exposure," he said.

Processing higher-grade Husab ore at Rossing would boost the competitiveness of a mine that Rio had suggested had become unprofitable, he said. Extract would also benefit by getting funding for Husab.

Extract has been in talks with Rio Tinto and others about the best development and financing options for Husab, which it has estimated would cost almost $US1.7 billion to develop as a stand-alone venture.

Extract shares fell 11¢ yesterday to $8.75 after jumping more than 10 per cent on Monday before being halted pending the update on the CGNPC-Kalahari talks.

[krakow] 11/10/2011 16:52

Good question zangdook. My guess is maybe NRRP will be retained by some entity of KAH outside the Chinese deal. However the Chinese do seem to be buying up as much of Africa as they can so they may retain it for the moment.
I hold NRRP and with all the recent and short term drilling activity it does seem great value.

[zangdook] 11/10/2011 16:22

If CGNPC buy KAH what are they likely to do with the NRRP holding? place it? hold it? dump it?

[sparty1] 11/10/2011 16:16

A Reminder...


north river up 17% for the second day running despite mkts down..

[krakow] 11/10/2011 14:56

That's what I thought, especially after Uramin. Now I'm sure shareholders will not see full value here. It's why I've been reducing over the last year or so. I've got a few left so I'll sit it out.

[beefeater25] 11/10/2011 14:39

Just cant see a once in a lifetime uranium deposit being taken out so cheap...

[krakow] 11/10/2011 14:19

It's more likely Rio already have things stitched up with the Chinese and will simply wait till the deal is done. Rio have had ample time to buy this on the cheap if they wanted it.

[beefeater25] 11/10/2011 14:16

I would be more surprised if Rio didnt launch a counter of 300p+

[nielsc] 11/10/2011 11:31

yasX,

Possibly a bit of both. CGNPC might try 260p, but even they know they will be pushing their luck. I would be unsurprise to see a 270p bid.

What interests me is what will follow. I do certainly hope someone else enters a higher bid.

Cheers,
Niels

[yasx] 11/10/2011 11:17

Nielsc,

I think the market is applying a discount to reflect the possibility the bid might not proceed rather than the price likely to be tabled.

I think the fact the bidder has returned to the table again suggests to me this will get takn out - and 270p seems the minimum given this was the elvel the second offer was tabled at previously.

dyor.

[nielsc] 11/10/2011 11:05

So the market is being quite cautious here.
A bid lower than 270p is the worry perhaps.


Cheers,
Niels

[thorpematt] 10/10/2011 07:09

Would that be one of those hats with the corks dangling from it?

[krakow] 10/10/2011 00:32

They have different regulations in Oz and suspend trading at the drop of a hat.

[doji star] 10/10/2011 00:30

EXTRACT Trading Halt pending an announcement

[krakow] 10/10/2011 00:26

That depends how you describe sparks. For me the sparks start at 400p. Anything less than that is tending more to the damp squib end of the scale.

[bene449] 09/10/2011 22:48

and it's just been announced on the headline banner on Bloomberg. We can expect sparks tomorrow.

[eddie catflap] 09/10/2011 21:52

and the FT again,



(edited. Removed repeat of The Australian story above)

[gero67] 09/10/2011 14:21

China's $2.2bn play for Extract Resources

by: Matt Chambers
From: The Australian
October 10, 2011 12:00AM

CHINA'S Guangdong Nuclear Power is set to launch a takeover bid for London-listed Kalahari Minerals, in a move expected to result in a $2.2 billion offer for Perth-based uranium company Extract Resources.

If the bid plays out as expected, it would be the biggest Australian mining takeover since Peabody Energy and Arcelor Mittal launched a $5bn bid for Macarthur Coal in July.

State-backed Guangdong has reopened talks with Kalahari on a deal that fell apart after the Fukushima earthquake and nuclear disaster, according to a report in London's Sunday Times.

A pound stg. 675 million ($1.07bn) takeover deal for Kalahari could be concluded as early as this week.

Kalahari is Extract's biggest shareholder, at 42.7 per cent, and Guangdong's key target in its bid is Extract's planned Husab uranium project in Namibia.

Under Australian takeover laws, if Guangdong acquires Kalahari, it will have to bid for Extract because it will acquire more than 20 per cent of the Australian company.

Because Guangdong is going after Extract's main asset, the Australian Securities & Investments Commission is unlikely to exempt Guangdong from extending the takeover to Extract.

Thrown into the mix is Rio Tinto, which owns 11 per cent of Kalahari, 14 per cent of Extract and the Rossing uranium mine in Namibia, which is next to Husab.

Guangdong is said to be offering 270p a share for Kalahari, an 11 per cent premium to the 240p price the target last closed at on London's Alternative Investment Market. Guangdong offered 290p a share for Kalahari in March, valuing the target at pound stg. 725m.

But it tried to slash its price to 270p a share after the Fukushima disaster sent uranium markets plummeting.

Talks broke down after Britain's Takeover Panel refused to let Guangdong reduce the offer and instead put in place a three-month cooling-off period, which has now expired.

During the previous bid, Guangdong said it would apply to ASIC for an exemption from having to make a bid for Extract.

Extract, in turn, asked ASIC to ensure that all its shareholders received equal benefit from Guangdong's bid for Kalahari.

Yesterday, Extract declined to comment on the possible Guangdong bid.

The equivalent value of a full bid for Extract, including Kalahari's stake, would be $2.2bn.

Rio, having started talks with Extract on developing Husab in February, was quiet about its intentions during the previous offer and after it was rejected.

Extract says it remains in talks with a number of parties about the mine, but nothing concrete has been worked out in the past eight months.

Husab is one of the largest uranium deposits in the world and is expected to be a key supplier to China's nuclear power stations.

The Chinese are being advised by Deutsche Bank. Kalahari has hired Ambrian Partners.

The takeover would be the latest instance of Beijing's increasingly aggressive pursuit of natural resources.

China's Minmetals last month launched a $1.3bn offer for Anvil Mining, a copper producer with assets in the Democratic Republic of Congo.

[sparty1] 09/10/2011 12:31

also in the times as well. Those who sell out at £2.70 might do worse than buy into the baby kah ....NRRP @ sub 2p it another exciting story ready to take off..imo..! Harlee take note ! They have immpressive assets including coal,an array of metals ,uranium prospects and are effectively almost half owned by KAH/EXT .Also three JV`s on the go.If KAH cash in like looks possible then a reasonable case could be made for kah to buy back the assets it sold nrrp very cheaply simply by buying up the very cheap shares. Due to current market nrrp are at half where they should be imo and if kah move... or the chinese want them as part of the deal ...boom! Over the last two months someone has been buying NRRP shares in tranches of 500K, 600K and 1Million.
Speculation that its kah is justified. They failed to take part in the last north river placement because of the last chinese bid(against takeover panel rules)They did however want to take part and will probably have been buying up the shares to offset the dilution.I`m out of kah these days but look forward reliving the excitment of those early days with NRRP

[bene449] 08/10/2011 23:43

Good news. Should get another 20p on Monday.

[eddie catflap] 08/10/2011 19:50

Piece in today's FT regarding 270p takeover. Usual suspects.