A mine shaft at the Cameco McArthur River mine site in northern Saskatchewan June 28, 2007.STRINGER/CANADA/Reuters
Hathor Exploration Limited says its board has rejected a hostile bid from uranium giant Cameco , calling the offer predatory and too low.
The Vancouver company said Wednesday a special committee of its board reviewed the $520-million bid from Cameco and is urging shareholders to reject the offer., which it said undervalues the miner and its prized Roughrider uranium deposit in northern Saskatchewan.
"Hathor's board of directors is firmly committed to ensuring that Hathor shareholders receive full value for their investment in this company, something this offer does not provide," said James Malone, chairman of the special board committee.
Michael Gunning, president and CEO, said investors and the stock market also believe the bid undervalues the junior miner.
"The fact that our shares have been consistently trading well above the offer price indicates that the market in general views this bid as inadequate. We urge them to reject this offer by taking no action."
On Tuesday, Hathor said its Roughrider deposit could be worth between $769-million and $1.5-billion — far above a hostile bid from Cameco.
However, Cameco Corp. said it believes Hathor is using unrealistic assumptions in valuating the Roughrider project.
"Based on our initial review of the summary results of the (preliminary assessment), we do not see any new information that would lead us to change our view on Hathor, or the premium value we are offering to its shareholders," Cameco CEO Tim Gitzel said.
Cameco is offering $3.75 cash per share of the Vancouver-based company — 45 per cent above the pre-announcement market price of $2.67 — but Hathor's stock has consistently traded above the bid.