Paladin Energy (ASX: PDN | OTCQX: PALAF) and Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF | FSE:2FU) have entered into a definitive arrangement agreement, pursuant to which Paladin will acquire 100% of the issued and outstanding shares of Fission by way of a court approved plan of arrangement under the Canada Business Corporation Act.
Fission shareholders will receive 0.1076 fully paid shares of Paladin for each Fission share held at the closing of the Transaction.
The offer consideration represents:
- An implied value of C$1.30 per Fission Share
- An implied equity value of C$1.14B
- A 25.8% premium to the closing price of the Fission Shares on the TSX (C$1.03) on 21 June 2024
- A 30.0% premium to the 20-day volume weighted average price of the Fission Shares on 21 June 2024
Upon completion of the transaction, Fission shareholders will own 24.0% of Paladin, which will have a pro-forma market capitalisation of approximately US$3.5B.
Paladin has applied for listing of the Paladin Shares on the Toronto Stock Exchange concurrent with completion of the Transaction, such that Fission shareholders will receive TSX-listed Paladin Shares.
Fission’s board of directors, following the unanimous recommendation by its special committee of independent directors, and in consultation with Fission’s financial and legal advisors, recommends that Fission shareholders vote in favour of the transaction.
Cantor Fitzgerald has provided an opinion to the special committee to the effect that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the offer consideration is fair, from a financial point of view to the Fission shareholders. SCP Resource Finance has provided an opinion to the board of directors of Fission, stating that as of the date of such opinion, based upon and subject to the assumptions, limitations and qualifications set forth therein, the offer consideration to be received by Fission shareholders under the Transaction is fair, from a financial point of view to Fission shareholders.
Directors and members of senior management of Fission holding 0.7% of the outstanding Fission Shares have entered into voting support arrangements with Paladin pursuant to which they have agreed to vote their Fission shares in favour of the transaction at the special meeting of shareholders to be called by Fission to approve the transaction.
The transaction is targeted to close in the September 2024 quarter (subject to satisfaction of all conditions under the agreement). The combination of Paladin and Fission will create a clean energy leader and will deliver the following benefits to both Paladin and Fission shareholders:
- Enhanced project development pipeline
- Multi-asset production expected by 2029
- Diversified presence across leading uranium mining jurisdictions of Canada, Namibia, and Australia
- Increased exposure to highly attractive long term uranium fundamentals
- Increased scale and global profile of Paladin with TSX listing
The transaction will also deliver several direct benefits to Fission shareholders:
- Attractive 30.0% premium to Fission’s 20-Day VWAP 6 and the ability to participate in the upside of Paladin
- Meaningful 24.0% ownership in a global, multi-asset uranium company with exposure to the producing Langer Heinrich Mine
- Continued exposure to the Patterson Lake South project’s future operational profile and exploration upside
- De-risk Fission’s PLS development funding, underpinned by LHM production and customer offtake contract book
- Opportunity to retain TSX-listed shares in a leading ASX100 growth-focused uranium company providing increased trading liquidity and an enhanced capital markets presence
To read more about this, please visit www.fissionuranium.com
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