Australian (ASX) Stock Market Forum

SMM - Summit Resources

Jump to new
could this takeover attempt force SMM to hurry up and release these JORC ann? PDN have timed this perfectly IMO, the takeover is before the uranium conference, SMM have JORC ann due and sp could have lagged because of this.

it is a nice premium although as chicken said around $10 would be nice.
 
This was a nice little boost to the share price, its a good start, but the share price is set to increase further once the JORC's are released and hopefully more around April if Labor joins the party.

I <3 Summit!
 
SMM trading again at same level of about $5.02

Any predictions on where SP will go now following latest ANN?
 
borat said:
sold out 2 days ago... Doh! feel like punching myself...
Click to expand...

Gee thanks...Now i dont feel as bad for only buying a few shares at $3.18:)
At least i still have them.

But because im new to investing and SMM was one of the first i invested in...I chose to spread my money around abit..namely in AGS (Doh!)
Guess Im paying for not putting more dollars into SMM.

Mind you....i think it was probably better of me to play it safe seen as i have no real clue about share markets :eek:
$5 a share is getting outs my price range now.
Im just a poor blue collar worker...not no point in buying like 25 shares..lol


:microwave
 
Paladin Bids A$997 Million for Summit to Get Uranium (Update5)

By Angela Macdonald-Smith

Feb. 27 (Bloomberg) -- Paladin Resources Ltd., whose stock is the world's best performer the past five years, offered to buy rival uranium explorer Summit Resource Ltd. for A$997 million ($791 million) to increase its Australian reserves.

Summit shareholders would receive one Paladin share for every 2.04 Summit shares they hold, the Perth-based company said today in a statement. That implies a price of A$5.05 per Summit share based on yesterday's closing prices, a 26 percent premium. Summit shares rose as high as A$5.11.

Companies including Areva SA, the world's biggest maker of nuclear power plants, are seeking supplies of uranium in Australia, a country with 40 percent of the world's reserves, as demand from power generators increases. Prime Minister John Howard in December urged Australia's state governments to end a ban on developing more mines, which has hampered companies such as BHP Billiton Ltd.

``Summit has a very large uranium resource base, one of the biggest undeveloped resource bases in Australia, so from that point of view it's attractive,'' said Gavin Wendt, senior resources analyst at Fat Prophets Funds Management. ``Paladin is looking five to 10 years down the track and is quite prepared to play a waiting game and hope that the situation will change and mining approvals will be granted.''

`Hostile' Offer

Summit, which is being advised by Gresham Advisory Partners, described Paladin's offer as ``hostile'' and advised shareholders to take no action while the board considers the bid.

``This offer is not unexpected and, in my opinion, is designed to capture value that will otherwise flow to Summit's shareholders,'' Summit Managing Director Alan Eggers said in the statement. ``We will be communicating more fully about this with our shareholders shortly.''

Summit, based in Perth, controls a uranium resource of more than 75 million pounds at Mt. Isa in Queensland, the largest of any company in Australia other than Rio Tinto Group and BHP Billiton., the company says on its Web site. Its most advanced project is the Valhalla uranium deposit near Mt. Isa in Queensland, which is operated and 50 percent-owned by Summit, while Paladin owns the rest.

Paladin's bid follows SXR Uranium One Inc.'s accord to buy UrAsia Energy Ltd. or $3.1 billion, while last year Canada's Mega Uranium Ltd. bought Redport Ltd. Uranium prices more than doubled in the past 12 months amid rising demand for the fuel for power generation, helping to almost triple Paladin's share price over the same period.

Paladin Shares

Shares in Paladin, the best performer in the Morgan Stanley Capital International World Index over the past five years, today fell as much as 62 cents, or 6 percent, to A$9.68. They were at A$10.04 at 2:29 p.m. Sydney time. Paladin is being advised by Azure Capital Partners.

Paladin stock has made a return of 34,085 percent in the past five years, according to data compiled by Bloomberg.

Shares in Perth-based Summit, which have surged more than sixfold in the past 12 months, rose as much as A$1.11 on the exchange. They were at A$5.06 at 2:30 p.m. in Sydney.

Paladin last week approved development of a $185 million uranium mine in Malawi, and earlier this year started its first uranium production at the Langer Heinrich mine in Namibia. It secured the stake in the Valhalla/Skal project through a A$174 million stock-based purchase of Valhalla completed in November.

``Summit has an attractive portfolio of Australian uranium deposits that will complement Paladin's extensive asset base,'' Paladin Managing Director John Borshoff said in the statement, which was lodged with the Australian Stock Exchange.

Production may start up at the Valhalla/Skal deposits in 2012, assuming the Queensland government reverses its policy stance and permits uranium mining in the state, Borshoff said.

Spot Prices

Uranium spot prices reached $85 a pound as of Feb. 19, up from $38.50 a year ago, according to the Ux Consulting Co. The price rise was partly prompted by delays to Cameco Corp.'s Cigar Lake project in Saskatchewan, Canada, due to flooding.

Prices may reach $95 a pound by 2008, up from an earlier forecast of $65, ABN Amro Holdings NV said in a Feb. 23 report.

``The significant number of new entrants in the uranium exploration space, the ongoing strength in uranium prices, and the five-year-plus lead time in taking a project from exploration to production are likely to lead to ongoing rationalization, and we expect some ongoing excitement in the sector,'' ABN analysts led by Warren Edney said in the report.

Bid `Makes Sense'

Paladin's bid for Summit ``makes sense and adds value,'' Edney said today. The offer looks ``cheap'' in terms of dollars per pound of uranium resource, compared with SXR's agreed bid for UrAsia, which is about twice as much on that measure, he said.

Australia's eight state and territory governments are controlled by the Labor Party, which is in opposition at a federal level. New federal leader Kevin Rudd favors scrapping the party's policy prohibiting any more than the existing three uranium mines, while other leaders, such as Western Australia Premier Alan Carpenter, remain firmly opposed to ending the ban.

Labor is due to hold a conference in April, where a position on uranium will be decided. That will come before the state and territory leaders will meet Howard during a twice-yearly Council of Australian Governments meeting in Canberra.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net .

Last Updated: February 26, 2007 22:52 EST

http://www.bloomberg.com/apps/news?pid=20601087&sid=aGOz4kxja8zQ&refer=home
 
Good move from PDN to close its offer on 16 April .... just 2 weeks prior to the national ALP conference (27-29 April).

I am sure PDN know very well that if the ALP modify their “three mines”policy to allow more uranium mining, that the price of many Australian companies such as MTN, PPN, AGS etc will increase quite considerably.

Their timing is is impeccable ... a hostile bid to buy cheap
 
Yeh that actually suprised me how it opened at only $4.80 and not closer to the takeover bid price.

Great opportunity to make 5% in about half an hour.
 
SP commenced at $4.80 after the announcement and continued upwards

11:20:00 4.8000 666 3,196.80
11:20:00 4.8000 17,909 85,963.20
11:20:00 4.8000 2,000 9,600.00
11:20:00 4.8000 91 436.80 -- trading commenced
10:13:45 4.1000 1,000 4,100.00 Pre-Open following ANN 10:24
10:13:36 4.0800 3,000 12,240.00
10:12:51 4.0800 2,000 8,160.00 XT
10:12:31 4.1000 2,440 10,004.00
10:10:49 4.1000 6,400 26,240.00

1. PDN 10:24 AM Announces Takeover Offer for Summit Resources Limited
http://www.asx.com.au/asx/statistic...?idsID=00697318


2. SMM 1:27 PM Paladin T/O Offer - Response to Shareholders
http://www.asx.com.au/asx/statistic...?idsID=00697506

13:37:00 5.0200 10,000 50,200.00
13:37:00 5.0200 1,200 6,024.00
13:37:00 5.0200 800 4,016.00
13:24:19 5.0200 1,300 6,526.00 Pre-Open following 1:27 ANN
13:23:59 5.0200 2,250 11,295.00
13:23:54 5.0100 200 1,002.00
13:23:54 5.0100 2,300 11,523.00


Finished the day
16:13:00 5.1200 546 2,795.52 LTXT
16:10:11 5.1200 3,000 15,360.00
16:10:11 5.1200 4,000 20,480.00
16:10:11 5.1200 1,000 5,120.00
 
Hhhhmm, not sure how I feel. The offer looked pretty good to me. Market cap of over a bill, for something not making money for another XX years.... :confused:
 
i think PDN really are worried about the upcoming court case. in addition to this the PDN sp has dropped significantly and come off their highs.

the offer should now be 1.5 PDN shares for 2 SMM shares IMO.

if PDN lose court case they will lose a huge foothold in australian uranium deposits!
 
Rafa, I think they offered 1 for 2, which then gave a valuation of SMM based on PDN's current SP. Now that PDN has fallen, it also devalues SMM value based on the ratio.
 

Similar threads

System
FNR - Far Northern Resources
Replies
1
Views
1K
Dona Ferentes
Dona Ferentes
ducati916
September DDD
2 3 4
Replies
66
Views
9K
qldfrog
qldfrog
mullokintyre
The Law of Unintended Consequences
2
Replies
23
Views
2K
basilio
basilio
System
WR1 - Winsome Resources
Replies
14
Views
3K
Dona Ferentes
Dona Ferentes
Dona Ferentes
Cobalt - general discussion
Replies
9
Views
3K
frugal.rock
frugal.rock
Top