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Cameco backs out of bidding for Hathor
Source: Agencies |
November 29, 2011, Tuesday
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Print Edition
Print Edition
CAMECO Corp said yesterday it is backing out of a bidding war for Hathor after Anglo-Australian miner Rio Tinto sweetened its bid for the Canadian uranium explorer to C$654 million (US$633 million).
"After careful consideration we cannot justify increasing the price beyond our current offer and accordingly, we will let our offer lapse," said Tim Gitzel, chief executive of Cameco, Canada's largest uranium miner.
Allowing the bid to lapse won't set back Cameco's plan to double annual uranium production to 40 million pounds by 2018, Gitzel said in a statement.
Cameco and Rio have been locked in a battle to acquire Hathor, which controls the large exploration-stage Roughrider project in the uranium-rich Athabasca region of Saskatchewan in Western Canada. Both companies see demand for uranium growing despite the pressure on the nuclear industry in the aftermath of the Fukushima disaster in Japan.
The Roughrider project is located 25 kilometers southeast of Cameco's Rabbit Lake mill and has the potential to produce at least 5 million pounds of uranium a year.
Cameco made a hostile C$520 million bid for Hathor in August, after talks aimed at a friendly deal fell apart over price.
Rio emerged as Hathor's white knight in October with a C$578 million bid.
Earlier this month, Cameco raised its bid to C$625 million, but Rio was quick to counter with a C$4.70 a share bid worth C$654 million, leading many analysts to speculate that Cameco would back-out of the race, as the price was already over 25 percent from its original bid.
"After careful consideration we cannot justify increasing the price beyond our current offer and accordingly, we will let our offer lapse," said Tim Gitzel, chief executive of Cameco, Canada's largest uranium miner.
Allowing the bid to lapse won't set back Cameco's plan to double annual uranium production to 40 million pounds by 2018, Gitzel said in a statement.
Cameco and Rio have been locked in a battle to acquire Hathor, which controls the large exploration-stage Roughrider project in the uranium-rich Athabasca region of Saskatchewan in Western Canada. Both companies see demand for uranium growing despite the pressure on the nuclear industry in the aftermath of the Fukushima disaster in Japan.
The Roughrider project is located 25 kilometers southeast of Cameco's Rabbit Lake mill and has the potential to produce at least 5 million pounds of uranium a year.
Cameco made a hostile C$520 million bid for Hathor in August, after talks aimed at a friendly deal fell apart over price.
Rio emerged as Hathor's white knight in October with a C$578 million bid.
Earlier this month, Cameco raised its bid to C$625 million, but Rio was quick to counter with a C$4.70 a share bid worth C$654 million, leading many analysts to speculate that Cameco would back-out of the race, as the price was already over 25 percent from its original bid.
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