Denison Mines opens bidding war with Uranium Energy for junior explorer

Saskatchewan-based uranium explorer UEX Corporation has become the focus of an M&A tug-of-war between Uranium Energy Corp and Denison Mines, after the latter posted a superior proposal to the former’s original offer.

UEX received an all-scrip bid from Texas-based Uranium Energy on June 13 which implied a consideration of C$0.43 per UEX share. The offer resembled a 50% premium to its last trading day close.

However, Denison’s bid, which was announced last week, is an all-share offer that – if successful – would allow it to own 100% of its flagship project in the Athabasca Basin in Northern Saskatchewan. Wheeler River is the largest undeveloped uranium property in the Eastern portion of the renowned geological basin, according to Denison.

Denison was widely viewed as the logical buyer for UEX, given it owns 95% of the advanced Wheeler River project, with UEX owning the remaining 5%.

“We believe that an 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 development and 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 Coates.

Uranium Energy has five business days to match Denison’s offer. If it doesn’t and UEX decides to cancel the offer, then the Canadian miner will have to pay a US$8.25 million termination fee.