With Japan’s unfolding nuclear disaster scaring many investors – and some governments – away from uranium, Russia’s Atomredmetzoloto (ARMZ) has come back with a more modest offer to buy Australia’s Mantra Resources (MRL-T, MRU-A) and its Mkuju River uranium project in Tanzania.
The lower price ARMZ has negotiated for the Perth-based junior, which has been accepted by Mantra’s board, is good news for Canada’s Uranium One (UUU-T), which has a deal with ARMZ to buy Mantra from it within a specified time frame.
In mid-December, ARMZ and Mantra agreed to a friendly, all- cash takeover in which Mantra shareholders would receive A$8 per share, which at the time represented a 15.5% premium to its 20-day volume-weighted average price. Under that deal, Uranium One had a 12-month option to buy Mantra from ARMZ for the same price.
Under the revised deal announced on March 21, Mantra shareholders will receive A$7.02 per share, comprising A$6.87 in cash from ARMZ, and a cash dividend of A15¢ to be paid by Mantra.
The revised offer extends Uranium One’s option to buy Mantra from ARMZ to 24 months, but Uranium One must buy about 15% of Mantra shares (US$150 million) from ARMZ within a shorter period.
Mantra’s strategic shareholder, Highland Park, which owns 13.5% of the outstanding, fully diluted share capital in Mantra, has also said it supports the new transaction.
Chris Sattler, Uranium One’s chief executive officer, describes Mantra’s Mkuju River project as “among the best uranium development projects in the world,” and said that the amended deal allows it to acquire the project “at a lower cost” while providing “additional flexibility to exercise the option.”
News of the revised offer sent Mantra shares up $1.26 or 23.6% to close at $6.60 in Toronto, with 4.7 million shares changing hands.
Over the last year, Mantra has traded between a low of $3.35 per share on July 9, 2010, and a high of $7.95 per share on Dec. 15, the day ARMZ’s original bid for the company was announced.
Mantra has 134.5 million shares outstanding.
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