Summit 'did not mislead shareholders'

In a letter to shareholders on Wednesday, Summit said it had received correspondence from Paladin's lawyers, Freehills, raising three issues of concern in relation to an earlier letter from Summit rejecting the takeover.

"In its letter, Freehills makes a number of strong assertions that Summit has tried to mislead you - assertions which we deny," Summit said.

The issues include comments on the participation of Summits foreign shareholders in the takeover offer, the availability of tax rollover relief and comments regarding the litigation in the Supreme Court between the two parties.

"Summit and its adviser have reviewed the letter from Freehills and we do not regard the issues that Freehills has raised as being material to your decision about whether or not to accept the offer," the company said.

"We do believe, however, that if Summit does not respond publicly to Freehills assertions, it is almost certain that Freehills will make an application to the Takeovers Panel on behalf of Paladin in respect of the allegations raised in their letter."

Summit said it had no concern responding to an application to the Takeovers Panel but it would be a waste of time and money, and chose to directly respond to the issues raised.

Paladin launched its hostile bid last week offering one share for every 2.04 fully paid Summit shares.

Summit rejected the offer, labelling it opportunistic and inadequate.

The focus of the bid is the large Valhalla/Skal uranium deposit, near Mt Isa in Queensland, which is held in a 50/50 joint venture between Paladin and Summit.

Paladin has an operating mine in Namibia and is working on bringing its second mine in Malawi online.

Summit shares gained 35 cents to $4.50 while Paladin's stock put on 66 cents to $8.85.