The National Post is Canada’s second largest national paper.
TORONTO – Two Toronto-listed uranium miners are merging as they try to build a stronger company that can thrive amid low uranium prices.
Energy Fuels Inc. announced Monday that it is buying Uranerz Energy Corp. for roughly $179-million in stock. The move brings together two U.S.-focused companies that are struggling to make money and attract investor interest in the stagnant uranium market.
The offer is a 37% premium to Uranerz’s closing price last Friday, and some investors thought that was too rich. Energy Fuels shares plunged almost 15% on Monday after the deal was announced.
“The premium didn’t make a lot of sense to us,” said Aaron Salz, a research associate at Dundee Capital Markets. Dundee concluded that the deal is dilutive to Energy Fuels’ net asset value by 35%, and thinks a competing bid is unlikely.
But from a strategic standpoint, experts said the deal is logical. It gives Energy Fuels more scale, lower operating costs and a uranium mine in Wyoming called Nichols Ranch where production can be expanded. Energy Fuels has been a major consolidator of U.S. uranium projects, and this acquisition continues the trend.
For the rest of this article, click here: http://business.financialpost.com/2015/01/05/energy-fuels-strikes-179m-deal-to-buy-uranerz-amid-rough-uranium-market/