(Reuters) - Canadian miner Fission Uranium Corp FCU.V said it would consider making a hostile bid for Alpha Minerals Inc AMW.V as Alpha had not engaged in “meaningful discussions” on its C$171 million ($162 million) buyout offer made last week.
In response, Alpha Minerals said it has formed a special committee to consider Fission’s proposal.
Alpha said it had responded to the offer before the expiry of Sunday’s deadline, and had requested for more time to consider the proposal. Fission made the offer on Friday.
British Columbia-based Fission had offered to pay C$7.26, representing a premium of 6 percent to Alpha’s closing on Friday. Alpha shares closed up 6 percent at C$7.25 on Monday.
“If Alpha continues to refuse to engage with Fission on the proposal, Fission will consider making a formal offer directly to Alpha’s shareholders,” Fission said.
Alpha Minerals said it has engaged Raymond James Ltd as its financial adviser and that it has been “an active participant in an ongoing dialogue with Fission over the past several months regarding consolidation.”
The deal, if successful, will give Fission complete control of the Patterson Lake South uranium project in the Athabasca basin in northern Saskatchewan.
Fission is the operator of the project, with a 50 percent stake. The rest is owned by Alpha Minerals, a gold and uranium miner.
Dundee Capital Markets Inc is advising Fission on the deal.
($1 = 1.0525 Canadian dollars)
Reporting by Krithika Krishnamurthy and Sruthi Ramakrishnan in Bangalore; Editing by Maju Samuel, Sreejiraj Eluvangal