Tinpo takes a pass on Western Prospector

Tinpo Holdings is taking back its offer for Western Prospector Group (WNP-V, WEPGF-O).

Rumblings that the Mongolian government is looking at nationalizing the country’s uranium industry was said to be the cause of the about-face.

Despite the withdrawal, Tinpo – a Hong Kong based private investment firm — said it still has an interest in Western Prospector but that the situation in Mongolia would have to improve before it would tender another offer.

Tinpo had been the white knight to Western Prospector, which was put in play by a much lower hostile bid Khan Resources (KRI-T, KHRIF-O).

Tinpo’s offer was $1.34-per-share besting Khan’s 58-per-share bid by 130%. The offer valued Western at roughly $74 million.

Western owns the Gurvanbulag uranium deposit in the central Asian country’s Saddle Hills district and it isn’t taking the withdrawal kindly.

“Western is of the view that Tinpo has no right, contractual or otherwise, to withdraw the offer or to fail in any other respect to perform its obligation to acquire the shares Western intends to pursue vigorously all of its rights and remedies against Tinpo,” it said in a release.

Tinpo is basing its withdrawal on an unpublished resolution from the Mongolian National Security Council. The document urged the government to look into full nationalization of the uranium industry and was submitted, unbeknownst to Tinpo, months before it made its offer.

The Tinpo offer was set to expire on Sept. 30 and had received enough support from Western’s shareholders to consummate the deal.

In Toronto on Oct. 1 Western Prospector shares were halted at the opening bell as news of the withdrawal appeared 45 minutes before the market opened.

Its shares were trading for $1.30 before the halt.