CGNPC withdraws Kalahari offer

12 May 2011

China Guangdong Nuclear Power Corporation's (CGNPC's) uranium subsidiary has withdrawn its £756 million ($1.23 billion) offer for Kalahari Minerals of the UK, which owns some 43% of Extract Resources, the developer of the Husab uranium project in Namibia. CGNPC-Uranium Resources Company's (CGNPC-URC's) offer of £2.90 ($4.72) per Kalahari share was announced on 7 March 2011. A few days later, after the onset of the Fukushima nuclear crisis, Kalahari and CGNPC-URC came to an agreement that the offer price would be lowered to £2.70 ($4.39) per Kalahari share, a total of £703 million ($1.14 billion). However, on 3 May the UK Takeover Panel said that the original announcement in March of the possible offer did not contain a reservation of a right for CGNPC-URC to subsequently reduce its offer. CGNPC-URC was therefore not permitted to reduce the price of its offer as it broke the "City Code" on takeovers and mergers. Kalahari appealed that decision, but on 10 May, without giving its reasons, the Takeover Panel dismissed that appeal. CGNPC-URC has now said that it "no longer wishes to make an offer for Kalahari on the terms announced on 7 March," but said it reserves the right to make another offer for Kalahari within the next six months.