Areva's $2.5bn offer for UraMin may spark global bidding war
June 18, 2007
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By Stewart Bailey
Johannesburg - Areva had offered to pay $2.5 billion (R18 billion) in cash for UraMin, to gain uranium mining assets as global demand for the nuclear fuel rebounds.
The world's largest maker of nuclear plants had agreed to pay $7.75 a share, UraMin said on Friday. That is 4.6 percent more than UraMin's closing price in the US on Friday and 7.6 percent more than last Monday, the day before UraMin first said it was in talks.
The acquisition will give French state-owned Areva exploration projects in Namibia, South Africa and the Central African Republic that have yet to start production.
"This is essentially the French government buying major uranium deposits in Africa to ensure its supply of a strategic resource," said Kevin Bambrough, a strategist at Sprott Asset Management in Toronto, UraMin's second-largest shareholder. "This is extremely bullish for the uranium sector."
"Shareholders are going to hold out for a higher offer," said John Meyer, a mining analyst at Numis Securities in London.
"It's a company with assets on the way to development. This could be attractive for other bidders."
Possible rival bidders included BHP Billiton, Anglo American and Rio Tinto, and Uranium One, which was developing South Africa's largest uranium deposit, said Meyer. Shareholders would probably hold out for about £4.50 (R64), he said. - Bloomberg |
