Uranium Energy’s upgraded offer trumps Denison in race to acquire UEX

uranium-energy’s-upgraded-offer-trumps-denison-in-race-to-acquire-uex

Uranium Energy’s latest offer brought an end to the three-way contest

Uranium producers have witnessed an increasing demand for the commodity in the past year.
Uranium producers have witnessed an increasing demand for the commodity in the past year. Photo by Martin Divisek/Bloomberg files

U.S.-based Uranium Energy Corp. is a step closer to acquiring Saskatchewan-based uranium explorer UEX Corp. after making an improved offer Monday that trumped a bid from Canadian miner Denison Mines Corp.

Advertisement 2

If UEX shareholders, who will be voting on the acquisition on Tuesday, accept the new offer, they will receive 0.0890 Uranium Energy shares for each UEX share, which is higher than the previous offer of 0.0831 UEC shares for each UEX share, and is about 49 cents per UEX share.

“We are pleased to have come to an agreement … the completion of this transaction will create the largest, diversified North American focused uranium company,” UEC’s CEO Amir Adnani said in a press release on Monday.

In June, Corpus Christi, Texas-based Uranium Energy said that it had entered into an all-share deal with Saskatoon-based UEX with an aim to enter the Canadian market. However, Denison Mines entered the race with an undisclosed proposal which UEX described as “superior” on July 29.

Advertisement 3

Uranium Energy’s latest offer on Aug. 8 brought an end to the three-way contest.

“While it is puzzling that the UEX board was not compelled by the premium offer made by Denison, we are nevertheless happy to see exploration assets in the Athabasca Basin so coveted by other industry participants,” Denison CEO David Cates said in a press release.

More On This Topic

  1. None

    Copper helps boost Barrick profit despite rising costs

  2. Nutrien Ltd. chief executive Ken Seitz.

    Nutrien makes Ken Seitz its third chief executive in less than three years

  3. A worker walks in the warehouse at Nutrien's Cory potash mine near Saskatoon, Saskatchewan. Nutrien has increased potash production to compensate for supplies cut off by the Russian, Ukraine conflict.

    ‘We don’t see these food security challenges abating:’ Nutrien profit soars to record $3.6 billion

Denison’s goal was to acquire 100 per cent of its flagship Wheeler River project, which it says is the largest undeveloped uranium property in the eastern portion of the Athabasca Basin in northern Saskatchewan. It currently owns 95 per cent of the project, while UEX owns the rest.

Article content

UEX CEO Roger Lemaitre believes that the merger with Uranium Energy will create the “go-to” name in the uranium industry.

UEX’s assets are all in the Athabasca Basin and include a 49.1 per cent interest in the Shea Creek project, which hosts about 67.6 million pounds of uranium in indicated resources and 82.8 per cent ownership in the Christie Lake project, which contains 20.4 million pounds of uranium in inferred resources.

Some of its more advanced projects include the Kiggavik and the Millenium, in which the company owns 16.9 per cent and 15 per cent interest respectively. Both these projects are in the feasibility stage, the final phase before a project aims to begin construction.

Uranium producers such as Cameco Corp. have witnessed an increasing demand for the commodity in the past year. In its quarterly call on July 27, Cameco’s CEO said that companies struggling to access renewable energy were gradually turning towards nuclear for electricity.

• Email: nkarim@postmedia.com | Twitter: naimonthefield

Top Stories Newsletter logo

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Free weekly Newsletter

A weekly breakdown of forecasts and trends

Enter your contact info to get The Financial Gambits VIP Newsletter for FREE.

We hate spam as much as you, if you dont like it just unsubscribe and we will never bother you again