Areva takes stake in Australian uranium explorer

11th April 2007, Comments 0 comments

SYDNEY, April 11, 2007 (AFP) - French nuclear group Areva on Wednesday formed a strategic alliance with Australian uranium explorer Summit Resources Ltd which could block a hostile takeover bid by miner Paladin Resources.

SYDNEY, April 11, 2007 (AFP) - French nuclear group Areva on Wednesday formed a strategic alliance with Australian uranium explorer Summit Resources Ltd which could block a hostile takeover bid by miner Paladin Resources.

Summit said the arrangement would give the company a greater ability to take uranium assets to production without ceding control.

"As a result of this strategic alliance, we will have the backing of the world's leading uranium industry player, which will significantly enhance our ability to unlock value for our shareholders as we take our world-class uranium assets from exploration success, through mine development to production," Summit chief executive Alan Eggers said.

"Areva's vote of confidence in our project and our future not only vindicates our belief that we have a world-class project, but also justifies our recommendation to reject Paladin's inadequate offer."

Summit directors earlier this year rejected Paladin's one billion dollar (825 million US) takeover bid, deeming it opportunistic and inadequate.

Under the arrangement with Areva, the French company will take an initial nine percent stake in Summit, buying 19.5 million shares at 6.20 dollars each.

Areva will have the option of buying a further nine percent at 7.20 dollars per share within two to six months of the first placement.

Summit said it was confident Areva would take the full 18 percent holding for a total investment of 292.6 million dollars (241 million US) at an average of 6.75 dollars per share.

Once the two placements go ahead, Areva will be able to market two-thirds of Summit's share of potential uranium production from its Australian projects.

Areva will also provide technical advice to Summit on its Mount Isa uranium project and be allowed to have a representative on the company's board of directors.

"This was about a long-term relationship, Areva has stated, quite clearly, that it is not about control of Summit," Eggers said.

"Most importantly, we will have a platform on which to develop a lasting relationship with the leading global marketer of uranium with a demonstrated track record of achieving premium prices for its customers."

Summit shareholders are expected to meet next month to consider the proposed share issue which must also satisfy Australia's foreign investment laws.

Summit shares closed up 65 cents at 5.80 dollars on Wednesday.
 
Australia has the world's largest known deposits of uranium but only two mines are commercially operational in the country.

New uranium mines are restricted by state bans but the federal government is pushing for these to be overturned to allow for the development of the country's nuclear industry.


Copyright AFP

Subject: French news

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