A bidding war appears to be getting underway within the uranium sector. Uranium Energy Corp (NYSE: UEC) late last night revealed it has received notification that a superior offer has been made for the acquisition of UEX Corporation (TSX: UEX), the Canadian-focused exploration firm the company moved to acquire last month.
At the time of announcement, UEX shareholders were to receive 0.0831 shares of UEC for each share held, which equated to $0.43 per share.
The competing bid apparently has come from Denison Mines (TSX: DML), a Saskatchewan-focused uranium exploration and development firm. Notably, Denison is the other part owner of the Wheeler River project, with the acquisition enabling the company to acquire whole ownership of the late stage project.
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Denison also owns half of JCU (Canada) Exploration, which holds interests in a total of twelve Canadian uranium projects. UEX owns the other half of the venture, with the venture owning a 30.099% stake in Cameco’s Millennium project, a 33.8118% stake in Orano’s Kiggavik project, and a 34.4508% interest in UEX’s Christie Lake project.
“We believe that an acquisition by Denison of UEX, and its assets in northern Saskatchewan, has the potential to benefit Denison shareholders – bolstering Denison’s position as a leading uranium development and exploration Company with an unwavering focus on the advancement of high-grade uranium deposits in the Athabasca Basin region,” commented David Cates, President and CEO of Denison Mines this morning, confirming the competing offer.
The competing offer reportedly comes via a non-binding acquisition proposal, the details of which have remained confidential. A definitive agreement has yet to be entered into, although the offer is classified as a superior proposal.
With the proposal being superior and notification received, UEC now has a period of five business days to offer to amend the terms of the acquisition of UEX, and to make a superior offer. If no offer is agreed to, UEC is to receive a termination fee of US$8.25 million as part of the original agreement.
“While the competing offer for UEX validates the merits of this acquisition, since announcing the transaction, there has been significant market deterioration in the sector and this has created a broader set of growth opportunities that would be highly accretive and strategic in nature. We continue to be in the driver’s seat with our acquisition of UEX, however, we have made no determination as to whether we will choose to match the competing offer,” commented UEC CEO Amir Adnani.
UEX Corporation last traded at $0.415 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
