Bannerman Resources receives cash offer from Hanlong Group
Bannerman Resources (ASX: BMN, TSX: BAN, NSX: BMN) is another example of the increased takeover activity in the small end of the Australian resource market, with the company receiving a conditional cash offer from Chinese conglomerate Sichuan Hanlong Group (Hanlong).
The Hanlong cash offer is priced at A$0.612 per share for 100% of Bannerman, which is a 59% premium to the last traded price of $0.385.
The offer is conditional on a number of factors including completion of due diligence by Hanlong and receiving Foreign Investment Review Board approval in Australia.
David Smith, Bannerman chairman commented on the proposal by saying that the offer has been timed to take advantage of Bannerman's low share price which has been adversely affected by macro issues such as the events at Fukushima and weak global equity markets.
"It is understandable that Bannerman is now attracting corporate interest.
"Bannerman controls one of the largest undeveloped uranium resources in the world and, despite recent events, there is no doubt that nuclear power will continue to play a key role in meeting the world's growing energy needs as well as alleviating greenhouse gas emissions."
Bannerman has recently been undertaking a process to identify a suitable joint venture partner to facilitate the financing, development and operation of the company's Etango Uranium Project in Namibia.
As part of this process, Bannerman has been in discussions with a number of large and well-funded parties.
Bannerman said Hanlong is seeking a three month period of exclusivity. Bannerman has resolved that it is not appropriate to grant Hanlong exclusivity given the absence of agreement on price and the conditionality of the proposal.
In addition to holding discussions with Hanlong in relation to the proposal, Bannerman intends to continue to advance its joint venture discussions with third parties in order to explore all options for delivering the best possible outcome for Bannerman shareholders.
Hanlong already has investments in other Australia resource companies, including a 56.84% stake in Moly Mines (ASX: MOL, TSX: MOL).
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