Uranium explorer and miner, Paladin Energy intends bailing out of its current takeover for NGM Resources after one of the conditions in its bid was breached by a terrorist attack in the African state of Niger earlier this month.
In a statement to the ASX late on Friday night, Paladin said that the attack on September 16 had breached one of the so-called self-defeating conditions in the offer.
As a consequence, the bid will end on October 8 and Paladin will keep its base holding of just over 22% and return the balance of the acceptances, which have so far reached nearly 60%.
Paladin was offering 1 new fully paid ordinary Paladin Share for every 23.9 NGM Shares held.
Paladin shares closed at $3.69 on Friday, down 6c, or 1.6%.
That valued NGM shares at 15.4c.
NGM shares ended at 15c, unchanged on the day.
They were trading around 9.5c when the Paladin offer was revealed earlier this month.
NGM shares will very likely retrace to this level or lower as a result of Friday’s announcement.
"On 16 September 2010, forces associated with al-Qaida in the Magreb (North Africa) (AQIM) entered the town of Arlit in Niger’s uranium mining region and abducted seven people, employed by the French uranium company Areva and its construction contractor, Vinci, Paladin said in Friday’s statement.
"Areva subsequently evacuated expatriate personnel from its operations in the north of the country and, in response to a request by the Government of Niger, France has dispatched anti-terrorism forces and reconnaissance aircraft to Niger.
"According to The Associated Press, in order “to kidnap seven foreigners from inside their homes, al-Qaida-linked gunmen in northern Niger forced their way past the security cordon of one of the world’s most heavily guarded mining towns.” Such action “shows a new level of brazenness”.
"In the light of these material unforeseen events, NGM’s ability to safely access, explore and develop the resource base of its exploration tenements following the completion of the takeover bid would be seriously compromised.
"Safety concerns would prevent Paladin Group expatriate personnel from working in Niger’s uranium region within a suitably secure environment for an, as yet, unknown period of time.
"As a consequence of these recent developments in Niger, the conditions of the Offer referred to above are no longer capable of being fulfilled. Paladin does not intend to free the Offer from these conditions; accordingly, the bid will lapse at 5.00pm (Perth time) on 08 October 2010, when all acceptances or the contracts resulting from acceptances of the Offer will become void.
"Paladin currently holds approximately 22.48% of the NGM shares on issue and has a relevant interest in 59.73% of the NGM shares (resulting from the above holding and acceptances under the Offer received to date).
"It is Paladin’s present intention to retain its current 22.48% shareholding in NGM. Paladin maintains its interest in Niger as a strategic region, recognising the country’s long history in uranium production and potential for further discovery. The Company will maintain a watch on the security situation there in order to determine its future strategy in regard to Niger."
Paladin explained that its bidder’s statement of September 2, 2010 "made clear that Paladin’s Offer was subject to a number of defeating conditions, which included (in paragraphs 10.12(l) and (m)) that prior to the conclusion of the offer period,
(i) there should be no outbreak of hostilities (whether war was declared or not), or terrorism, or mobilisation of armed forces, material increase in the intensity of any of the above events or other event beyond the control of NGM or the relevant subsidiary which affects or is likely to affect, and
(ii) no change occurs, is discovered or becomes public which could reasonably be expected to have a materially adverse effect on, the assets, liabilities, financial position, performance, profitability or prospects of NGM or any of its subsidiaries."
