Under the terms of the agreement, Paladin will acquire 100 percent of the issued and outstanding shares of Fission, while Fission shareholders will receive 0.1076 fully paid shares of Paladin for each Fission share that they hold.
This exchange represents an implied value of C$1.30 per Fission share, a 25.8 percent premium to Fission’s closing price on June 21, and a 30 percent premium to the company’s 20 day volume-weighted average price.
Once the transaction is complete, Fission shareholders will own approximately 24 percent of the combined entity, while Paladin shareholders will account for the remaining 76 percent.
Fission President and CEO Ross McElroy also commented on the deal, saying it will create a diverse world-class uranium producer that has “the ability to expand production and cash flow profiles in the near term.”
Paladin has applied to list its shares on the TSX, ensuring that Fission shareholders will receive TSX-listed Paladin shares.
The companies are targeting to complete the transaction by this year’s September quarter.
The uranium market faced a prolonged downturn after the Fukushima nuclear disaster in 2011, but prices for the energy fuel have risen substantially since mid-2023, driven by tightening supply and growing demand.
An upward trend that began in 2021 gained significant momentum in 2023. By January of this year, the uranium spot price had surged past the US$100 per pound mark for the first time in 17 years, influenced by global events such as the Russia-Ukraine war and the growing realization that it will take miners time to bring supply online.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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