Paladin Energy (ASX:PDN) is facing opposition to its proposed acquisition of Canada’s Fission Uranium (TSX:FCU) from a Chinese backer in the takeover target.
The Western Australia-based uranium producer, which has a market capitalisation of $2.8 billion, says CGN Mining Company – a subsidiary of China General Nuclear Power – holds a disclosed interest of 11.26% in Fission and is opposing approval of the tie-up.
In late June, Paladin revealed it had entered into a definitive agreement to acquire all of the shares of Fission Uranium in exchange for 0.1076 Paladin shares for each Fission share held.
This values Fission Uranium at C$1.14 billion ($1.25 billion), or C$1.30 per share, which is a 25.8% premium to the closing price of Fission Shares on the TSX on 21 June, and a 30% premium to the 20-day volume-weighted average price of Fission shares to 21 June.
In mid-July, Paladin received approval from Canada’s competition watchdog under the Investment Canada Act and Competitive Act to go ahead with the planned acquisition.
The proposed takeover went before the Supreme Court of British Columbia on 13 September for final approval. However, Paladin says the hearing will now continue on 26 September.
Fission received a 67.9% vote in favour of the deal on 9 September, but it is still subject to closing conditions, including receipt of the final order from the court approving the arrangement.
Paladin CEO Ian Purdy says Fission’s Patterson Lake South Project in Saskatchewan, Canada is a natural fit for the company, delivering medium-term development potential to augment production from the recently restarted Langer Heinrich Mine in Namibia.
“With producing assets, a quality near-term development project and a global portfolio of exploration assets, Paladin is well positioned to continue to deliver value for its shareholders from the structural demand shift for uranium driven by global decarbonisation,” he says.
Paladin shares dipped 4.3% to an intra-day low on the ASX on Monday morning (16 September) of $8.97, while Fission’s shares closed down 3.33% at C$0.87 last Friday (13 September). Fission has a market capitalisation of C$747.1 million.
Write to Angela East at Mining.com.au
Images: Fission Uranium
