Australia's Paladin raises scrip offer for Summit Resources, extends deadline

Australia's Paladin raises scrip offer for Summit Resources, extends deadline

	Published : Thu, 12 Apr 2007 01:46 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - Paldin Resources Ltd said it has increased its scrip takeover offer for uranium explorer Summit Resources Ltd to one Paladin share for every 1.67 Summit shares, up from the previous offer of one for 2.04 shares.

The Africa-based uranium miner said the revised offer will be extended by 14 days to April 27 and is final, in the absence of a competing offer.

Paladin's announcement follows Wednesday's news that Summit Resources had entered into a strategic alliance with French nuclear group Areva.

Areva planned to purchase 19.5 mln Summit shares at 6.20 aud per share, representing a nine pct shareholding and a cash injection of 121.1 mln aud into the Australian company with an option of increasing its stake in Summit to 18 pct at a price of 7.20 aud per share and a further 171.5 mln aud.

Paladin chief executive John Borshoff said that in addition to these shares and a right to representation on the Summit board, Areva also benefits from a raft of valuable contractual rights including pre-emptive rights over Summit's assets, an anti-dilution option, uranium marketing rights over the majority of Summit's share of uranium production and protection against competing bids.

The chief executive said that it was important for Summit shareholders to realize that when the Areva deal is taken in its entirety, the price Areva is paying for the placement shares is substantially below Summit's headline figures.

Borshoff said the cost to Areva of the shares is actually 6.20 aud less the value of the options and rights granted to Areva.

His company's valuation of Summit's share option alone is 0.26 aud per share, implying a value per Summit share of around 5.94 aud which is supported by the Summit trading prices after announcement of the proposal.

'The values of the pre-emptive rights and uranium marketing rights are more difficult to quantify but clearly they are of material value,' Borshoff said.

(1 usd = 1.21 aud)

paul.daniel@xfn.com