NYSE-listed pure play uranium company Uranium Energy Corporation (UEC) has submitted an improved buyout offer to UEX Corporation (UEX).
This while Denison Mines Corporation is also trying to acquire all UEX shares in a competing offer.
Under the terms of UEC’s revised offer, each holder of UEX shares will now receive 0.0890 of one common share of UEC for each UEX share held, implying a consideration of about C$0.49 per UEX share.
This assumption is based on the closing price of UEX shares and UEC shares on the TSX and the NYSE, respectively, and the spot exchange rate as of August 5.
The revised UEC offer values UEX at C$0.49 a share – a 7% improvement over the original exchange ratio and higher financial consideration than the Denison proposal based on closing prices of the shares and the spot exchange rate as at August 5.
The revised UEC offer reflects a premium of 72% over the unaffected UEX share price on June 10.
The revised UEC offer also increases the break fee by 7%, which is an increase proportional to the percentage increase in the offered exchange ratio under the revised UEC offer.
UEC president and CEO Amir Adnani says that, after careful analysis and consideration, the company firmly believes the revised UEC offer represents a value-creating opportunity for UEC and UEX shareholders.
“We remain disciplined with respect to pursuing accretive growth and the revised UEC offer strikes a balance of a modest increase in the exchange ratio while doubling UEC’s uranium resources at only a 14.2% dilution to our outstanding shares.”
UEX security holders are scheduled to vote on UEC’s proposed acquisition of the UEX shares based on the revised UEC offer on August 9, with closing of the transaction (subject to court approval and the satisfaction or waiver of closing conditions customary for a transaction of this nature) anticipated within days of the UEX security holder vote.
UEC says it understands that more than 38% of eligible UEX securities have already tendered, with 93.7% voting in favour of the UEC transaction.