The board of directors for Summit has decided to accept Paladin Resources' (OTCPK:PALAF) higher takeover offer, bringing Paladin’s hostile takeover attempt to a successful close.
In the light of the current price of uranium, the offer appears to be very fair for Summit, considering the uncertain legal environment surrounding Summit’s properties in Queensland. I don’t think it is a particularly great deal for Paladin, but I don’t think they overpaid either. At the very least, getting the deal done takes away some risk that Paladin would fail in their first big expansion acquisition, and it does significantly add Paladin’s reserves.
Given the price of the deal, I don’t think this acquisition will do much to add to the near term price of Paladin’s stock, but it does take away the uncertainty that led me to swap out of Paladin in favor of sxr Uranium One (SXRFF.PK). With the acquisition out of the way, I would expect Paladin’s shares to once again take their cues from the spot uranium price.
PALAF 1-yr chart