Cameco (TSX:CCO) is boosting its offer for junior uranium developer Hathor Exploration Ltd. (TSX:HAT) to $625 million, as it battles a competing bid from global miner Rio Tinto.
The Saskatoon-based uranium producer says the higher offer for Hathor is worth $4.50 per share.
It also marks a 8.4 per cent premium over a $578-million friendly deal between Hathor and Rio Tinto PLC (TSX:RIO). Rio is offering $4.15 per Hathor share cash.
“Cameco’s increased offer to Hathor shareholders provides an attractive premium over Rio Tinto’s offer and makes sense for Cameco given our unique position in the Athabasca Basin,” said Cameco president and CEO Tim Gitzel in a release.
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Cameco first went public with its plans for Hathor in late August but has been consistently rebuffed by the junior mining company, which says Cameco’s offer is too low.
The higher offer will expire on Nov. 29.
Hathor’s main asset is the Roughrider uranium deposit – about 25 kilometres northwest of Cameco’s Rabbit Lake mill.
Last week, Cameco share took a beating after the company expressed uncertainty over the near-term outlook for the nuclear power industry and reported third-quarter results that missed analyst expectations.
The company said net income was $39 million, compared to $98 million a year earlier, largely due to foreign exchange losses. Adjusted for one-time items, earnings were $104 million, up from $80 million. Adjusted earnings per share of 26 cents missed the 32 cents analysts polled by Thomson Reuters had on average been expecting.
The future of the global nuclear power industry has been in question since a tsunami and earthquake destroyed Japan’s Fukushima Daiichi nuclear power plant in March.
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