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Re: PDN - Paladin Resources
Howdy H, And Summit have made it quite clear they are not over keen at this stage, although the shareholders seem keen to sell at a nice profit atm, and who can blame them ............. for those who have not seen this news report ............... (The last sentence may be prophetic in the months to come )
Paladin likely to take SummitBy Robin Bromby
February 28, 2007 12:00am
ALAN Eggers looks likely to lose control of his uranium explorer Summit Resources to Paladin - but he was making clear last night that he won't go down without a fight.
He told shareholders to ignore any communication from Paladin Resources, which yesterday launched a hostile $1.01 billion scrip offer for his company, a move that would give it full control of Queensland's two most advanced uranium deposits, near Mt Isa.
But despite the advice to do nothing, shareholders were taking the money and running yesterday as Summit shares soared $1.12 to the offer price of $5.12.
And no wonder: the Paladin offer of one of its shares for every 2.04 Summit shares prices Summit at $US27 a pound of uranium in the ground based on the present resource - and that is not far short of the $US32/lb being paid in the takeover of Canada's UrAsia Energy. Normally there is a much greater disparity between Australian and North American valuations.
Valhalla has a resource so far of 16,900 tonnes of uranium while Skal has been estimated from drilling to date to have 4990 tonnes.
Moreover, the paper bid means those who don't sell will move from being shareholders in a company whose main asset is locked up by Queensland's prohibition on uranium mining to holding stock in one that is producing uranium in Namibia, will produce in Malawi from 2009 and has extensive deposits in other parts of Australia.
Mr Eggers could hardly have been surprised.
Paladin last year took over Valhalla Uranium, which was Summit's 50-50 partner in Valhalla and Skal.
The move to mop up the other half has been widely expected.
Paladin chairman Rick Crabb said the company had been busy getting its Langer Heinrich mine in Namibia into production. It felt free to move on Summit following last week's signing of a development agreement with the Malawi Government for its Kayelekera deposit in that country.
Mr Crabb said Paladin had not spoken to Mr Eggers before launching the off-market scrip bid.
"We didn't see any advantage in that," he added.
Mr Eggers said the bid did not capture the full value that would eventually flow to Summit shareholders. "At this stage, shareholders should take no action, ignore all communications from Paladin and await our further advice."
Far East Capital's Warwick Grigor, who has followed Summit and long predicted that Paladin would make this move, said it was an attractive offer.
"It's a good chance for everyone to cash out," he said.
Mr Grigor said this type of offer showed the bull market still had a lot further to run.
Halba said:
Howdy H, And Summit have made it quite clear they are not over keen at this stage, although the shareholders seem keen to sell at a nice profit atm, and who can blame them ............. for those who have not seen this news report ............... (The last sentence may be prophetic in the months to come )
Paladin likely to take SummitBy Robin Bromby
February 28, 2007 12:00am
ALAN Eggers looks likely to lose control of his uranium explorer Summit Resources to Paladin - but he was making clear last night that he won't go down without a fight.
He told shareholders to ignore any communication from Paladin Resources, which yesterday launched a hostile $1.01 billion scrip offer for his company, a move that would give it full control of Queensland's two most advanced uranium deposits, near Mt Isa.
But despite the advice to do nothing, shareholders were taking the money and running yesterday as Summit shares soared $1.12 to the offer price of $5.12.
And no wonder: the Paladin offer of one of its shares for every 2.04 Summit shares prices Summit at $US27 a pound of uranium in the ground based on the present resource - and that is not far short of the $US32/lb being paid in the takeover of Canada's UrAsia Energy. Normally there is a much greater disparity between Australian and North American valuations.
Valhalla has a resource so far of 16,900 tonnes of uranium while Skal has been estimated from drilling to date to have 4990 tonnes.
Moreover, the paper bid means those who don't sell will move from being shareholders in a company whose main asset is locked up by Queensland's prohibition on uranium mining to holding stock in one that is producing uranium in Namibia, will produce in Malawi from 2009 and has extensive deposits in other parts of Australia.
Mr Eggers could hardly have been surprised.
Paladin last year took over Valhalla Uranium, which was Summit's 50-50 partner in Valhalla and Skal.
The move to mop up the other half has been widely expected.
Paladin chairman Rick Crabb said the company had been busy getting its Langer Heinrich mine in Namibia into production. It felt free to move on Summit following last week's signing of a development agreement with the Malawi Government for its Kayelekera deposit in that country.
Mr Crabb said Paladin had not spoken to Mr Eggers before launching the off-market scrip bid.
"We didn't see any advantage in that," he added.
Mr Eggers said the bid did not capture the full value that would eventually flow to Summit shareholders. "At this stage, shareholders should take no action, ignore all communications from Paladin and await our further advice."
Far East Capital's Warwick Grigor, who has followed Summit and long predicted that Paladin would make this move, said it was an attractive offer.
"It's a good chance for everyone to cash out," he said.
Mr Grigor said this type of offer showed the bull market still had a lot further to run.
