Uranium One Inc. (UUU.TO: Quote) Monday said it has entered into a definitive agreement with Russia’s JSC Atomredmetzoloto and its affiliate, Effective Energy N.V., collectively called ARMZ, for the company would be taken private pursuant to a plan of arrangement.
Under the plan of arrangement, ARMZ would acquire all common shares that ARMZ and its affiliates do not already own for a cash consideration of C$2.86 per share.
The cash consideration represents a 32 percent premium to the 20-day volume weighted average price of the common shares on the Toronto Stock Exchange for the period ending January 11. The stock closed at C$2.41 on that day.
ARMZ and its affiliates currently own 51.4 percent of the Uranium One common shares. The transaction provides total consideration to minority shareholders of around C$1.3 billion and implies an equity value for Uranium One of about C$2.8 billion.
The Board of Directors of Uranium One has unanimously determined that the Plan of Arrangement is in the best interests of the company and is fair to its shareholders, following the recommendation of a special committee of independent directors.
The determination also followed the advice of legal and financial advisors to the Independent Committee and the company.
Canaccord Genuity Corp., which is acting as financial advisor to the Independent Committee, has opined that the consideration to be received is fair, from a financial point of view.
GMP Securities L.P., which prepared a formal valuation of the common shares under the supervision of the Independent Committee, concluded that fair market value of a Uranium One common share is in the range of $2.66 to $3.21, equivalent to C$2.62 to C$3.16.
The implementation of the plan of arrangement will be subject to approval by the holders of the affected securities at a special meeting expected to be held in March. It will be subject to approval by a majority of the votes cast by shareholders other than ARMZ and its affiliates, in addition to approval by 66 percent of the votes cast by holders of common shares.
All of the directors and senior officers of Uranium One have entered into voting agreements and have agreed to vote their common shares in favour of the plan of arrangement.
It is expected that the transaction, if approved by Uranium One securityholders and the Court, will be completed in the second quarter.
The arrangement agreement provides for a non-solicitation covenant on the part of Uranium One. It also provides ARMZ with a “right to match” and requires the company to pay a termination fee equal to C$45 million in certain circumstances.
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by RTT Staff Writer
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