The bidding war between mining giant Rio Tinto and Cameco Corp, one of the world's largest uranium producers, for control of junior uranium miner Hathor Exploration intensified yesterday with Rio Tinto raising its friendly bid to about C$654 million ($634 million).
The C$4.70 a share offer from the Anglo Australian miner topped a C$4.50 a share revised hostile bid from Cameco for Vancouver-based Hathor, which holds the Roughrider uranium deposit in northern Saskatchewan's Athabasca Basin, an area considered to hold vast reserves of the nuclear-reactor fuel.
London-based Rio Tinto's latest offer is around 25-per cent higher than Cameco's first offer of C$3.75 a share made late No 9 August, and 4.4 per cent higher than Cameco's offer last week of C$4.50 a share.
Expecting a sweetened offer from Rio Tinto, investors raised Hathor share price through heavy trading in Toronto to close at $5.05, an indication that shareholders believe that the bidding war is not yet over.
Investors anticipate the competition for Hathor to escalate since both mining giants have strong reasons to want to buy its assets in the resource-rich Athabasca basin.
Hathor's board, which had earlier approved Rio Tinto's offer, renewed its approval yesterday of its latest bid. Hathor's directors and senior management have entered lock-up agreements with Rio Tinto, but the agreement allows Hathor to scout for better offers with a break-up fee of C$20 million.