Paladin Energy Agrees to Buy Fission Uranium -- Update

Dow Jones06-24

By Rhiannon Hoyle

Australian uranium company Paladin Energy has agreed to buy Canada's Fission Uranium in a deal that has an equity value of roughly 1.14 billion Canadian dollars (US$833 million) and aims to create a globally significant supplier of the nuclear fuel.

Paladin is offering Fission shareholders 0.1076 share in Paladin for each one they hold in Fission, an implied value of about C$1.30 and a nearly 26% premium to Fission's closing price in Toronto on June 21, the companies said in a joint statement on Monday.

Paladin, which is recently restarted production at its Langer Heinrich mine in Namibia, wants to become a global uranium leader, said Chief Executive Ian Purdy. Both companies have projects in Canada that combined could create a top uranium-development hub, he said.

Emerging from a decadelong downturn, uranium prices have been running hot as miners struggle to meet demand from utilities and financial buyers. The companies expect strong future demand for nuclear power amid a global energy transition, and predict a shortage in uranium supply because of a lack of investment over the past decade.

"Both sets of shareholders are expected to benefit from the increased scale of the enlarged company, with a combined mineral resource representing one of the largest amongst pure-play uranium companies globally," Purdy said.

Fission CEO Ross McElroy said the combined company would have a more powerful balance sheet that could fund its key project, Patterson Lake South, via mostly cash flow and debt, limiting further equity dilution.

Paladin is seeking to list its shares on the Toronto Stock Exchange so that all Fission shareholders can hold the stock, the companies said. Fission shareholders would own 24% of Paladin, they said.

Directors in Fission recommend shareholders vote in favor of the deal, which the companies said they expect to complete before the end of September.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

June 24, 2024 03:30 ET (07:30 GMT)

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Paladin Energy Agrees to Buy Fission Uranium -- Update

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