UEX shares jumped 13.8% or $0.058 to 47.2 cents on volume of 4.7 million after Denison confirmed that it has made a confidential proposal to UEX Corp. that would see Denison acquiring all the issued and outstanding shares of the company.
In its press release, Denison also acknowledged the disclosure made by Uranium Energy Corp (UEC).
In a July 28, 2022 press release, UEC said it has received notice from UEX Corp. regarding Denison’s acquisition proposal.
According to the press release, UEX has further advised UEC that the board of directors of UEX have determined that the Denison proposal constitutes a “superior proposal” as defined in the arrangement agreement dated June 13, 2022, as amended June 23, 2022, among UEX, UEC and UEC Acquisition Corp. and that UEX intends (subject to UEC’s right to match the Denison proposal) to enter into an agreement with Denison to implement the Denison proposal.
Under the terms of the agreement announced on June 13, 2022, each holder of the common shares of UEX would receive 0.0831 of a UEC share in exchange for each UEX share. This share exchange ratio implied a consideration of approximately 43 cents per UEX share, UEC said.
UEC said it has the right, for a period of five business days from receipt of UEX’s notice, to offer to amend the terms of the arrangement agreement. In the event that UEC elects not to match and if UEX terminates the arrangement agreement in order to enter into an agreement with Denison, then UEX is required to pay to UEC a termination fee in the amount of US$8.25 million, UEC said.
UEX is a Canadian uranium and cobalt exploration and development company involved in a portfolio of uranium projects located in the eastern, western, and northern perimeters of Saskatchewan’s Athabasca Basin, the world’s richest uranium region, an area that in 2020 accounted for approximately 8.1% of the global primary uranium production.
In a press release Friday, Denison said its non-binding proposal remains subject to the entering into of a definitive arrangement agreement. It said any discussions with respect to a transaction remain subject to the terms of a non-disclosure agreement entered into between Denison and UEX.
“We believe that the 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 and development exploration company with an unwavering focus on the advancement of high-grade uranium deposits in the Athabasca Basin region,’’ said Denison President and CEO David Cates.