(Reuters) - Canadian uranium companies Denison Mines Corp DML.TO 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.
Both companies have canceled the shareholders’ meetings scheduled for Wednesday.
Up to Friday’s close, Denison Mines’ shares had declined 9.4 percent since the announcement of the deal, while Fission Uranium’s stock had lost nearly a third of its value.
Denison Mines agreed to buy Fission Uranium in July to create a diversified uranium company in a strong position in the Athabasca Basin in northern Saskatchewan through Fission’s Patterson Lake South Project and Denison’s Wheeler River Project.
The combined company, which was to be named Denison Energy Corp, was expected to be equally owned by shareholders of both the companies.
($1 = 1.2994 Canadian dollars)
Reporting by Sneha Banerjee in Bengaluru and Rod Nickel in Winnipeg, Manitoba; editing by Don Sebastian and Dan Grebler