www.kalahari-minerals.com
Kalahari Minerals plc is an AIM and NSX listed resource company with uranium, gold, copper and other base metal interests in Namibia. The Company’s key value drivers are its holding of approximately 40% in ASX, TSX and NSX listed Extract Resources Limited and its circa 45% interest in AIM listed North River Resources plc.
Kalahari shares hit 300 pence, but will a second suitor actually materialise?
Shares in Kalahari Minerals (LON:KAH) have crept above 300 pence with investors betting the company may have more than one suitor.
On Monday the miner received a 290 pence a share, or £756 million conditional offer from CGNPC-URC, a subsidiary of one of China’s largest nuclear generators.
Rio Tinto would appear to be the obvious counter-bidder with an 11.5 per cent stake.
The mining super-major is also in talks with Extract Resources (ASX:EXT, TSE:EXT) to merge its Rössing Uranium Mine in Namibia with the Husab project owned by Extract Resources.
Kalahari owns 43 per cent of Extract, making this a very tangled web of cross-holdings.
Just to add to the confusion, Japanese conglomerate ITOCHU owns a 15 per cent stake in Kalahari.
Singer Capital Markets analyst Charlie Long says a counter offer is a possibility, but reckons CGNPC-URC management will have spoken to major investors.
This morning he pegged back his price target for Kalahari to 290 pence a share from 305 pence.
“Kalahari shares are currently trading around the 300 level which suggests the market is expecting a counter-bid or that one of Kalahari’s major shareholders is building a position in defence,” Long said in a note to clients.
“We believe the Chinese will have discussed the terms of a potential offer with the major shareholders - Rio Tinto, ITOCHU - but we cannot be certain.
“If it is assumed that the Chinese want 100 per cent ownership of Rossing South, Rio Tinto or ITOCHU could easily block a 90 per cent acceptance condition, whilst the possible offer also includes a break clause in the event of a counter-bid 5 per cent above 290 pence.”
On Monday Kalahari revealed that the unit of China Guangdong Nuclear Power had lodged what it called a “potential offer” for the company.
CGNPC-URC will only go ahead with the bid once it has secured the backing of the regulators and has tied up the financing of the deal.
The management of the Kalahari, lead by chairman Mark Hohnen, have indicated they will back the takeover once it is formally tabled.
He said on Monday: “The Kalahari board has considered the possible offer from CGNPC-URC carefully in the context of other opportunities available to Kalahari and the Kalahari board believes this represents attractive value for Kalahari shareholders.
“If made, the possible offer would enable Kalahari shareholders to crystallise this value now, in cash.
