Paladin Energy makes takeover bid for Summit Resources

Image: Summit Resources

Western Australia-based Paladin Energy has launched a takeover offer for smaller uranium company Summit Resources.

Summit owns several uranium deposits and projects in Australia, most prominently the Mount Isa North uranium project, which includes five main deposits and several smaller prospects outside of Mount Isa in Queensland.

The company also holds a 50 per cent interest with Paladin subsidiary Mount Isa Uranium at the Isa Uranium joint venture (JV), which contains three major deposits: Valhalla, Odin and Skal.

Paladin already holds just over 82 per cent of Summit and intends to make an off-market bid for the shares of the company it doesn’t currently own.

The offer is subject to Paladin receiving an acceptance rate of at least 75 per cent from Summit shareholders and an overall interest of 90 per cent in the company.

Summit will receive one new Paladin share for each Summit share at Paladin’s 5-day weighted volume average price (VWAP) of 20.2 cents per share. This represents a 68 per cent premium on Summit’s last closing price of 12 cents, valuing the target at $44.01 million.

An independent board of directors has unanimously recommended the offer in the absence of a superior proposal, subject to the approval of an independent expert. An independent board was consulted as Paladin’s chief financial officer Craig Barnes also serves as an executive director of Summit.

“Paladin’s offer provides Summit shareholders with an opportunity to become shareholders in a company that has exposure to a broader range of uranium projects and with a stock which has greater liquidity than what Summit currently enjoys,” said Summit non-executive director Mal Randall.

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