Mr. Ken Williamson reports
URANIUM ONE ENTERS INTO DEFINITIVE AGREEMENT WITH ARMZ FOR GOING PRIVATE TRANSACTION FOR CDN$2.86 PER SHARE IN CASH; BOARD UNANIMOUSLY RECOMMENDS TRANSACTION
Uranium One Inc. has entered into a definitive
agreement with JSC Atomredmetzoloto and
its affiliate, Effective Energy N.V. (collectively ARMZ), under which
the company would be taken private pursuant to a plan of arrangement. ARMZ and its affiliates currently own
51.4 per cent of the Uranium One common shares.
Under the plan of arrangement, ARMZ would acquire all of the common shares that ARMZ and its affiliates do not already own for cash
consideration of $2.86 per share. The cash consideration represents
a 32-per-cent premium to the 20-day volume-weighted average price of the common shares on the Toronto Stock Exchange for the period ending Jan. 11,
2013.
The transaction provides total consideration to minority shareholders of
approximately $1.3-billion and implies an equity value for Uranium
One of approximately $2.8-billion.
The board of directors of Uranium One has unanimously (with Vadim Jivov, Mr. Sattler and Mr. Yampolskiy abstaining) determined that the plan of arrangement is in the best interests of Uranium One and is fair to its
shareholders.
The determination of the board was made upon the recommendation of a
special committee of independent directors, and after consideration of the advice of legal and
financial advisers to the independent committee and the company.
Ken Williamson, chairman of the independent committee, stated: "This
proposal represents a significant premium to the 20-day volume-weighted
average price of the common shares prior to today's announcement. We
recommend that shareholders vote in favour of the plan of arrangement
at the special meeting of shareholders that will be called to approve
the transaction."
Canaccord Genuity Corp., which is acting as financial adviser to the
independent committee, has provided an opinion to the effect that, as
of the date of the opinion and based upon and subject to the
limitations and qualifications therein, the consideration to be
received for the common shares is fair, from a financial point of view,
to the holders of the common shares (other than ARMZ and its
affiliates). GMP Securities L.P. has prepared and delivered a formal
valuation of the common shares under the supervision of the independent
committee as contemplated by Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. GMP Securities concluded that, subject to the
assumptions, qualifications and limitations provided in the formal
valuation, that the fair market value of a Uranium One common share is
in the range of $2.66 (U.S.) to $3.21 (U.S.) (equivalent to $2.62 to $3.16
using Friday's closing exchange rate of 1.0154) as at the date of the
formal valuation.
"Despite the uranium industry's currently challenging outlook, ARMZ will
continue with its strategy of developing Uranium One into the leading
global uranium producer, which was the basis of our original investment
in the company," said Vadim Jivov, chairman of the board of ARMZ.
The implementation of the plan of arrangement will be subject to
approval by the holders of the affected securities at a special meeting
expected to be held in March, 2013. As the
transaction will constitute a "business combination" for the purposes
of Multilateral Instrument 61-101, the implementation of the plan of arrangement will be
subject to approval by a majority of the votes cast by shareholders
other than ARMZ and its affiliates, in addition to approval by 66-2/3 per cent of
the votes cast by holders of common shares. The transaction also will
be subject to applicable regulatory approvals and certain closing
conditions customary in transactions of this nature.
The arrangement agreement provides for, among other things, a
non-solicitation covenant on the part of Uranium One (subject to
customary fiduciary out provisions). The arrangement agreement also
provides ARMZ with a right to match and requires the company to pay a
termination fee equal to $45-million in certain circumstances. All
of the directors and senior officers of Uranium One have entered into
voting agreements pursuant to which, among other things, they have
agreed to vote their common shares in favour of the plan of arrangement.
The terms and conditions of the proposed transaction will be disclosed
in an information circular that will be mailed in February, 2013, to the
securityholders of Uranium One that will be entitled to vote at the
special meeting. It is anticipated that the transaction, if approved by
Uranium One securityholders and the court, will be completed in the
second quarter of 2013.
Within 30 days of completion of the transaction, Uranium One will make
an offer to purchase the $259,985,000 principal amount of
7.5-per-cent (reset to 5-per-cent) convertible unsecured subordinated debentures due
March 13, 2015, as prescribed by the terms of the
debentures. The completion of the transaction is not dependent on any
approval from the debentureholders or the acceptance of the offer to
purchase.
Goodmans LLP and Cassels Brock & Blackwell LLP are acting as legal
counsel to Uranium One and the independent committee, respectively.
BMO Capital Markets is acting as financial adviser, and Stikeman
Elliott LLP is acting as legal counsel, to ARMZ.
Uranium One has engaged Kingsdale Shareholder Services Inc. as its proxy
solicitation agent. Shareholders with questions should contact
Kingsdale at North America toll-free 1-877-659-1818 or collect
1-416-867-2272.
Copies of the arrangement agreement, the information circular for the
special meeting and certain related documents will be filed with
Canadian securities regulators and will be available on SEDAR.
We seek Safe Harbor.
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