Uranium producer Cameco raises hostile offer for Hathor to $625 million

Cameco Corp, one of the world's largest uranium producers, raised its hostile offer for Canada's Hathor Exploration Ltd by 20 per cent to $625 million, challenging a competing bid from Anglo Australian mining giant Rio Tinto.

Saskatoon, Canada-based Cameco has raised its bid from the earlier $3.75 a share to $4.50 a share in cash, 8.4 per cent more than Rio Tinto's 19 October cash offer of $4.15 a share or $578 million.

Cameco, Canada's largest uranium miner had made a $3.75 per share bid in August, but the friendly talks fell apart over the acquisition price.

''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,'' Cameco chief executive Tim Gitzel said in a statement.

Hathor's directors and senior management have entered lock-up agreements with Rio Tinto and have agreed to tender their shares to its offer. But the agreement allows Hathor to scout for better offers with a break-up fee of C$20 million.

Vancouver-based Hathor holds the Roughrider uranium deposit in northern Saskatchewan's Athabasca Basin, an area considered to hold vast reserves of the nuclear-reactor fuel.