Ashurst is advising People’s Republic of China (“PRC”) state-owned energy group CGNPC Uranium Resources Co., Ltd (“CGNPC-URC”) in respect of its recommended possible cash offer for the entire issued and to be issued share capital of Kalahari Minerals plc (“Kalahari”).
Kalahari is an AIM- and NSX-listed mining company with uranium, gold, copper and other base metal interests in Namibia. CGNPC-URC is a nuclear power producer with material interests in nuclear fuels procurement and production.
Kalahari’s key value driver is its 42.8% holding in Extract Resources Limited (listed on ASX, TSX and NSX). Extract is developing the Husab uranium project, strategically located within a 50km radius of several word class uranium deposits.
The possible offer will comprise 290 pence in cash for each Kalahari share, valuing Kalahari’s fully diluted share capital, including shares attributable to the Options and Convertible Loan Notes, at approximately £756 million (US$1.23 billion). The making of a formal offer is conditional upon the satisfaction of certain pre-conditions, principally relating to receipt of normal PRC governmental approvals for outbound investments.
The Ashurst team advising CGNPC-URC is being led by Hong Kong corporate partner Robert Ogilvy Watson, with assistance from London corporate partner Adrian Clark and London corporate counsel Karen Davies, as well as Hong Kong associate Victor Chan. Partners Mark Vickers in London and Matthias Schemuth in Hong Kong are advising on financing aspects of the offer. US partner Stuart Rubin in Hong Kong is advising on US law aspects of the transaction.
Guantao Law Firm is advising CGNPC-URC on PRC law aspects of the transaction, while Minter Ellison is advising CGNPC-URC in respect of Australian law. Lawrence Graham is acting for Kalahari.
Commenting on the transaction, Robert Ogilvy Watson said:
“We are delighted to be involved in this major transaction which, if it completes, will be only the second acquisition of a UK-listed company by a Chinese state-owned enterprise (“SOE”). CGNPC is at the forefront of China’s diversification from its reliance on fossil fuel sources towards clean energy and is part of the growing trend towards outbound investment in the energy sector. This instruction came about as a result of our close alliance relationship with Guantao, who are very well placed with SOEs and whose track record in the PRC complements our own global strength in the energy sector.”
Adrian Clark commented:
“I am very pleased to work with Robert and the Hong Kong team on this significant cross-border transaction. As Asian, and in particular Chinese, energy companies becoming increasingly acquisitive, I would expect to see more deals of this nature involving UK-listed targets, since the London Stock Exchange is home to some of the world’s leading natural resources companies. We are in a good position to benefit from this trend, with our extensive cross-border public M&A experience and a strong corporate presence on the ground in Asia.”
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