Denison, Fission cancel merger as investor support falls short

Tue Oct 13, 2015 1:54pm EDT
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By Sneha Banerjee and Rod Nickel

(Reuters) - Canadian uranium companies Denison Mines Corp (DML.TO: Quote) and Fission Uranium Corp FCU.TO said on Tuesday they have terminated their C$483 million ($371.71 million) merger agreement due to opposition from Fission's shareholders.

While a majority of the Fission shares voted were in favor of the purchase by Denison, the required two-thirds approval was not obtained, the companies said in a statement.

"A lot of people who own our stock tend to be the type who want a home run, not a single," Fission Chief Executive Dev Randhawa said in an interview. "They feel combining it with another company dilutes the story."

Cantor Fitzgerald analyst Rob Chang said some Fission shareholders did not support the combination because it lacked operational synergies. They viewed Denison's assets as lower quality than Fission's Patterson Lake South project in northern Saskatchewan, he added.

Randhawa said he does not expect a revised offer from Denison.

Fission's shares jumped 5.8 percent, or 4 Canadian cents, to 73 cents in Toronto, while Denison's stock gained 1.5 percent, or 1 Canadian cent, to 68 cents.

Fission will continue drilling at Patterson Lake, viewed by some as the best undeveloped uranium deposit in the world, and resume its search for a strategic investor, Randhawa said.

At the deadline for submission of proxies on Friday, Denison's shareholders strongly supported the arrangement.   Continued...