Saskatoon-based uranium giant Cameco (TSX:CCO; NYSE: CCJ) this morning announced a hostile takeover bid for Vancouver-based junior uranium mining company Hathor Exploration Ltd. (TSX: HAT).
Hathor is focused on exploration in the Athabasca Basin of northern Saskatchewan. Its most significant asset is the Roughrider uraniuim deposit.
Cameco’s all-cash, $3.75 per share offer values Hathor at approximately $520 million or 40% above its share closing price yesterday and 33% over the company’s 20-day volume-weighted average price.
Cameco said in a release that it delivered a written proposal to Hathor after market close August 19 outlining its interest in acquiring the company for $3.75 per share.
“Cameco made today’s announcement after discussions with Hathor regarding a potential board-supported transaction failed to result in an agreement,” the release stated.
Hathor spokesperson Kelsey Murray said the board rejected the offer based on valuation.
She didn’t identify what Hathor believes to be fair market valuation but noted that
the company’s analyst target price from Dundee Securities is $5.60. She also pointed to merger and acquisition activity in the uranium sector over the last year, such as Bannerman Resources Ltd. offering a 120% premium for a low grade deposit.
She added that, with an average grade of 11%, Roughrider is in a “significantly different stratosphere” than most uranium projects, which have grades between 0.05% and 0.1%.
At press time, Hathor’s stock was up 46% to $3.90.
Jenny Wagler
Twitter: JennyWagler_BIV