Hathor embraced Rio Tinto's $578-million friendly bid Wednesday after dismissing Cameco's $520-million overture as predatory and too low.
The prize both companies are seeking is Hathor's Roughrider uranium deposit in northern Saskatchewan.
Cameco said it is reviewing Hathor's offer and will update shareholders when it decides the next step.
"The superior Rio Tinto offer provides fair value to Hathor shareholders over Cameco's current hostile, unsolicited takeover offer," Hathor chief executive Michael Gunning said in a statement.
"The strategic context of the Rio Tinto offer underscores the 'best of breed' global stature of the Roughrider uranium deposit relative to its peers of undeveloped uranium deposits around the world."
Hathor has previously pegged the value of the Roughrider deposit at between $769 million and $1.5 billion -- a view dismissed by Cameco as overly optimistic.
Cameco says developing Roughrider would be too expensive for other companies because they don't have the processing capacity and other infrastructure the Saskatoon company already has in place in northern Saskatchewan.
Hathor's board of directors has unanimously recommended shareholders accept the offer from Rio Tinto, which has major mining and refining operations in Canada, employing more than 13,000 people at 35 sites.
Barry Allan, an analyst with Mackie Research Capital, said Rio Tinto is offering a "beautiful" valuation for Hathor shareholders.
"It is definitely a top-shelf mining company," he said. So them coming to say 'OK, we're prepared to get involved' is quite a nice validation of Hathor and what Hathor has been able to achieve there on the Roughrider property."
However, Allan said he doubts Cameco is going to simply walk away.
"It would be too easy for Cameco to just kind of roll up the rug here, and I don't see why they would, given the fact that they do have the infrastructure in the area," he said.
"They have the ability to actually increase their offer without eroding the economics to them, given that they've already spent significant amounts of money in the Athabasca Basin, and particularly that region of the Athabasca Basin."
Despite troubles in the global nuclear industry, demand for uranium is expected to grow and Saskatchewan is one of the world's leading suppliers of the fuel used to power reactors.
