China Guangdong Nuclear Power Group Co's display area at a nuclear energy equipment exhibition in Shanghai. The company may bid again for the parent company of uranium explorer Extract Resources Ltd. [Photo / China Daily]

UK rules mean Chinese company can make new approach next week

SYDNEY - China Guangdong Nuclear Power Group (CGNPC) Co may bid again for Kalahari Minerals Plc, triggering an acquisition of uranium explorer Extract Resources Ltd, after withdrawing an offer in May, according to Patersons Securities Ltd.

"The Chinese will be back," Simon Tonkin, senior resources analyst at Patersons, said on Thursday from Perth, Australia. "It's likely."

The United Kingdom's Takeover Panel barred State-owned China Guangdong from lowering a March proposal of 290 pence ($4.63) a share that valued Kalahari at 756 million pounds, the London-based resource company said on May 10. Both companies had approached the panel with a price cut to 270 pence a share, a move that after Japan's nuclear crisis slashed the value of Kalahari's 43 percent holding in Sydney-listed Extract.

China Guangdong can make a fresh bid from Wednesday - three months after the previous acquisition offer was denied - under UK rules, Tonkin said. A new offer for Kalahari may be about 250 pence a share, he said.

Shares of Kalahari climbed 4.8 percent on Wednesday to close at 218 pence in London trading, valuing the company at about 535 million pounds.

A telephone message left at the London office of Kalahari after hours wasn't immediately returned. Meanwhile, John Gardner, a Sydney-based spokesman for Extract, declined to comment on Thursday. Six telephone calls to China Guangdong's public relations department seeking comment weren't returned.

Offer for extract

With Kalahari owning 43 percent of Extract, Australian rules would normally require China Guangdong, the country's second-biggest atomic plant builder, to make an offer for Extract, Patersons said in March.

Extract, which on Wednesday announced a 37 percent gain in reserves at its Husab project in Namibia, rose 0.4 percent to A$7.23 ($7.79) at 2:40 pm Sydney time, valuing the company at A$1.8 billion. The shares have fallen 23 percent this year, compared with a 13 percent decline in the benchmark S&P/ASX 200 Index.

The acquisition of Kalahari would give China Guangdong access to Extract's Husab project as China seeks uranium to increase nuclear power generation. Extract expects China will remain keen to expand its atomic power program after the March 11 earthquake and tsunami in Japan crippled the Fukushima Dai-Ichi plant north of Tokyo, Chief Executive Officer Jonathan Leslie said on March 23.

Bloomberg News