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Rio Tinto (RIO -1.9%) is making a C$578M all-cash bid for Canadian uranium miner Hathor...

Rio Tinto (RIO -1.9%) is making a C$578M all-cash bid for Canadian uranium miner Hathor Exploration (HTHXF.PK). The offer represents an 11% premium to an August bid from Cameco (CCJ -2.9%). Politicians might object to Rio Tinto's bid out of a wish to see Hathor acquired by a fellow Canadian firm.
Comments (1)
  • chyten
    , contributor
    Comments (195) | Send Message
     
    Given the value if the Roughrider deposit, and adjacent deposit, the Hathor board rejected the Cameco bid as grossly inadequate. The Rio offer, which is only 11% more than the Cameco offer, would therefore appear to be inadequate as well.
    Moreover, the Rio offer has a relatively low break up fee, that Cameco could easily absorb, while making a higher counter offer.
    Given the value of Hator's deposit to Cameco, that is in close proximity to an existing Cameco mill that could be use to process the acquired deposit, I would expect a higher bid by Cameco that blows Rio out of the water.
    In addition, the Canadian government would undoubedtly prefer a Canadian suitor to take over this valuable resource, which will pressure Hathor to take the bid from Cameco, once it it raised to a fair value, rather than the bid from the Australian company, Rio Tinto.
    For these reasons, I will not be tendering my HTHXF shares in repsonse to the Rio offer.
    19 Oct 2011, 12:48 PM Reply Like
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