The forecast consolidation of the uranium sector is forging ahead, with Paladin Resources Ltd making a $174 million friendly takeover bid for explorer Valhalla Uranium Ltd.
Paladin has offered one of its shares for every 3.16 Valhalla shares, implying a price of $1.45 per share and valuing the target at $174 million.
In a statement, Valhalla directors unanimously recommended that shareholders accept the bid in the absence of a superior offer.
"The directors also believe that Paladin Resources' uranium industry experience embracing marketing, development, construction and operation coupled with its balance sheet strength will provide the opportunity to significantly grow and develop Valhalla Uranium's assets."
The company was formed by the spin off of Perth gold mining company Resolute Mining Ltd's uranium properties. Resolute retains an 83.3 per cent shareholding in Valhalla, which is currently subject to escrow.
Therefore the holders of at least 50 per cent of the non-escrowed Valhalla shares must accept the Paladin offer before the Resolute holding can be released from escrow, unless the ASX agrees otherwise.
Valhalla has interests in a number of uranium projects in Queensland and the Northern Territory, the most advanced being the Valhalla/Skal uranium deposits in northern Queensland.
Valhalla has a 50 per cent interest in those deposits with Summit Resources, the manager of the project.
In a statement released to the stock exchange, Paladin said the acquisition would Paladin's development pipeline and provide further diversification in geographical, political and resource terms.
Paladin said the takeover would add up to three potential projects to its medium to long term development pipeline, and that the company would support Summit in progressing the exploration and appraisal of the deposit to ensure readiness should their long hoped-for change in Queensland uranium mining policy occur.
Last week, uranium group Redport Ltd revealed it was to merge with Canadian company Mega Uranium and Hong Kong's Crosby Capital launched a $33.4 million hostile takeover bid for Adelaide-based Marathon Resources Ltd.