ARMZ drops bid for Mantra on Japan turmoil

Finance

Publishing Date: 17 Mar 2011 10:39am GMT
Author: Mining Journal

JSC Atomredmetzloto (ARMZ) has pulled a US$1.2 billion takeover offer for Australian uranium explorer Mantra Resources Ltd in the aftermath of Japan’s nuclear crisis.

A statement released by ARMZ's subsidiary Uranium One Inc said ARMZ notified Mantra that the decision was taken as it believed “the recent serious events at the nuclear power plant in Fukushima, Japan, are likely to have a material adverse effect on the business, results of operations, assets or liabilities, financial position or prospects” of the company.

However, ARMZ added it intends to continue discussions with Mantra about a possible future transaction “by way of an alternate approach”.

ARMZ had offered US$8/share for Mantra, which was a 17% premium to the company’s 20-day trading price prior to the offer being made.

Under the proposal, Vancouver-based Uranium One has the option to acquire all of ARMZ’s Mantra shares for a sum equal to the acquisition costs and certain other expenses.

Mantra fell 28% on the ASX (the most in two years) during today’s trading following the news.