Shares in dual-listed uranium miner Summit jumped after the company announced a strategic alliance with French nuclear company Areva.
Areva will take a 9 per cent stake in Summit, buying 19.5 million shares at A$6.20 a share, for A$121.1 million ($138.7 million).
There was also the promise that
Areva might increase its shareholding to 18 per cent at A$7.20 per share, between two and six months after the initial placement. If so, Summit would receive another A$171.5 million, taking Areva's total investment to A$292.6 million.
Summit said its board was confident Areva would take up its extended entitlement, acquiring its shares at an average price of A$6.75 - a 31 per cent premium to Summit's closing price last Thursday.
In return, Areva will market two-thirds of Summit's share of uranium production from its Australian projects, and provide technical advice on Summit's Mt Isa uranium mine.
The deal is subject to foreign investment approval.
Shares in Summit rose 46c to close at $6.52 on the NZX yesterday. On the ASX, they jumped A65c to A$5.80.
Alan Eggers, Summit's managing director, said the deal would give Summit the backing of the world's leading uranium industry player.
"We will have the financial resources needed to bank the project. We will have access to additional technical support.
"Most importantly, we will have a platform on which to develop a lasting relationship with the leading global marketer of uranium with a demonstrated track record of achieving premium prices for its customers."
Eggers said the deal justified the board's recommendation shareholders reject Paladin Resources' hostile A$1 billion offer.
The Paladin offer closes on Monday and Summit said to date Paladin had received acceptances for less than 1 per cent of Summit shares.
- NZPA
