URZ buyout at $10 can it be true?
URZ buyout at $10 can it be true?
Uranerz Energy, the listed uranium exploration and development entity, has been approached regarding a sale, chairman of the board, Dennis Higgs said. The company, however, has repeatedly turned down interested parties, he added. "We are a target. I can tell you with certainty a large number of companies have approached us," Higgs said, while declining to name specific firms. "To be acquired by someone who has undervalued us doesn't make sense. We don't want to sell," he added. The uranium sector is starting to see its share of M&A activity. Last Monday, Energy Metals Corp (EMC) announced it is merging with acquisitive uranium partner, SXR Uranium One, in an all-stock transaction. That deal represents a 28% premium to the 20-day volume weighted average trading prices of Uranium One's and EMC's shares on the TSX for the period ending 17 May. Further, in an interview with this news wire service, chairman of Ur-Energy's board, Jeffrey Klenda said that the TSX-listed uranium explorer is currently in talks regarding a possible sale, and has also been approached repeatedly. Higgs said there are two main obstacles standing in the way of a potential hostile bid for Uranerz. First, directors and officers own 19% of the company; second, the company's management team would not be interested in leaving the company in a possible takeover, explained Higgs. When pressed regarding a possible takeover price, Higgs said the company is held by over 9,000 shareholders as such, a sale would be contingent on their recommendations. "With our stock at USD 6.00, our shareholders might accept USD 10.00, but I'm not going to say that management would accept that," he added. An industry banker said a USD 10.00 per share offer would represent a fair value if the company could receive that type of premium. The banker described Uranerz as "a good little company" in the right area, with historical resources that have to be converted to 43-101s. Similarly to Ur-Energy, Uranerz' most attractive assets are located in Wyoming. The company has 13 projects in the Powder River Basin (PRB), which based on historical data has 18 million pounds of uranium, Higgs said. Uranerz does not currently have a producing asset, but permitting is expected to begin this year, he added. In addition to Wyoming, Uranerz also has assets in Saskatchewan and Mongolia. Higgs also said Uranerz has USD 15.5m in cash. However, the banker noted that Mongolian assets are still considered riskier due to political uncertainty in that country and are deemed less attractive than projects in the US. With respect to timing, the banker commented that Uranerz is trying to work towards getting listed with the Canadian exchanges, of which a number of technical disclosures will have to be met. Once that occurs, it will give Uranerz more shareholder base exposure, helping its liquidity, he added. Other active uranium players in the PRB include the largest uranium player in the world, Saskatchewan-based Cameco, and the second largest, France's Areva. Further, other uranium players, like UK-based Paladin Resources and Vancouver-based Denison Mines have been tagged as possible acquirers. Headquartered in Vancouver, British Columbia, AMEX-listed Uranerz has a market cap of USD 228.6m.
by Cheryl Thompson and Nadia Damouni
Source : mergermarket Size : 100m - 500m (USD) Value : 228 m USD (Current market cap) Stake Value : more than 30% inclusive Grade : Confirmed Alert : Mining Intelligence ID : 483185