Uranio, Manhattan in merger deal

Cash-poor uranium explorer Uranio has planned a scrip-based merger with a private company headed by uranium industry stalwart Alan Eggers, and has tipped further corporate deals.

Uranio shares skyrocketed 10.5 cents, or 53.85 per cent, to close at 30 cents today.

Under the deal, the 19 shareholders of Manhattan Resources Pty Ltd have agreed to sell their interests in Manhattan in exchange for 44.2 million new shares in Uranio.

Manhattan was formed by Mr Eggers, the former managing director of Summit Resources, after Summit was taken over by Paladin Energy in May 2007.

Uranio brings to the larger entity a substantial uranium resource of 10.9 million pounds (Mlb), plus exploration upside of 6.6Mlb to 15.4Mlb, at the `Double 8' deposit at its Ponton project in Western Australia.

Manhattan brings balance sheet strength, bolstering Uranio's $1.2 million in cash and bank deposits with its $7.84 million in cash deposits and investments in Australian stock exchange-listed uranium companies.

Uranio said the merged group would be named Manhattan Corporation Ltd and would pursue growth through mergers and acquisitions.

Mr Eggers will become executive chairman of the new entity while Uranio's current chairman Marcello Cardaci will remain on the board as a non-executive director.

Uranio managing director Robert Wrixon will continue in his current role.

Mr Eggers and his associates already hold 19.76 per cent of Uranio.

Upon completion of the proposed merger, Mr Eggers will be Manhattan Corporation's third largest shareholder with an 8.29 per cent stake.

Managed investment fund Minvest Securities (New Zealand) Ltd will be the top shareholder with a 22.91 per cent interest.

The deal is subject to conditions, including Uranio completing due diligence of Manhattan's business, Uranio shareholders approving the transaction at a meeting in mid-July and an independent expert report concluding it is fair and reasonable.