08/09/2009 - 09:23

Energy Metals in $84m takeover deal

08/09/2009 - 09:23

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West Perth-based uranium explorer Energy Metals has recommended a proportional takeover bid by a Chinese firm, which will underwrite an $11.7 million rights issue.

West Perth-based uranium explorer Energy Metals has recommended a proportional takeover bid by a Chinese firm, which will underwrite an $11.7 million rights issue.

Energy Metals said it has signed a binding implementation deed with China Guangdong Nuclear Power Holding Co (CGNPC) for a takeover of 70 per cent of its shares.

CGNPC will offer Energy Metals' shareholders $1.02 for each share held, a near 19 per cent premium to the target's last traded price of 86 cents before it entered a trading halt.

The offer is valued at nearly $84 million.

Energy Metals largest shareholder, Jindalee Resources, has indicated it will accept the bid in the absence of a superior proposal.

Jindalee holds a 40 per cent stake in Energy Metals.

The directors in Energy Metals have also indicated they will accept the offer.

The bid is subject to regulatory approvals and a minimum acceptance condition of 50.1 per cent. A break fee of $500,000 has been set.

Meantime, Energy Metals said it intends to undertake a one-for-nine rights issue should CGNPC's takeover be successful.

Shares will be priced at 90 cents each and will raise the company $11.7 million. CGNPC has agreed to underwrite the raising.

Funds raised will be used to speed up Energy Metal's 53.7 per cent owned Bigrlyi uranium project near Alice Springs in the Northern Territory.

Energy Metals said the maximum interest CGNPC can take in the company after the takeover and the raising is 73 per cent.

"We are very pleased to have reached this agreement with a subsidiary of one
of the world's leading clean energy enterprises," Energy Metals chairman Oscar Aamondt said.

"The Energy Metals Board believes that CGNPC's financial resources, technical expertise and strategic intent to develop its uranium resource portfolio, will greatly assist Energy Metals in its transition from explorer to developer and producer."

CGNPC operates four nuclear power stations in China with more under construction.

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