Australia's Summit Says Expects Paladin to Raise Bid (Update1)
By Angela Macdonald-Smith
March 20 (Bloomberg) -- Summit Resources Ltd., an Australian uranium explorer, formally rejected a share-based takeover offer from Paladin Resources Ltd. and said it expects the larger Perth- based rival to come back with a higher bid.
Paladin's offer doesn't reflect ``unrealized potential'' in Summit's exploration projects, Summit Chairman John Seton said today in a letter to shareholders lodged with the Australian Stock Exchange. Summit's Mt. Isa uranium deposit in Queensland may be developed into one of the world's top five uranium projects, the company said.
Paladin is offering one share for every 2.04 Summit shares, valuing Summit at A$4.49 a share, or about A$886 million ($707 million), based on yesterday's closing share prices. Summit shares closed yesterday at A$4.60, higher than the equivalent stock offer.
``We think that Paladin will come back because its our belief at this stage that they won't secure control of the company with the offer on the table and they really need a world-class project in a first-world country and that's something they don't have,'' Alan Eggers, managing director of Perth-based Summit, said today on a teleconference with reporters.
Shares in Paladin, which have more than doubled in the past six months, today gained as much as 28 cents, or 3.1 percent, to A$9.38 on the exchange. They were at A$9.16 at 3 p.m. in Sydney. Summit shares, which have more than trebled in the past six months, today rose as much as 10 cents, or 2.2 percent, to A$4.64. They were at A$4.60 at the same time.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at
amacdonaldsm@bloomberg.net.
Last Updated: March 20, 2007 00:12 EDT