Uranium Energy Corp. UEC

🤠I know in this day & age everyone wants quick & easy ❓

[mangoe]

John Quakes

@quakes99 -

I know in this day & age everyone wants quick & easy answers to complex questions regarding this massive acquisition deal in the #Uranium sector that seeks to merge a ramping-up major producer in #Namibia with one of the world's top tier mine development projects in #Canada, but there is a lot more to this deal than meets the eye. Here are some initial thoughts:

The door is now open to other potential superior offers that might come to the table in the coming month as shareholders dig deeper into the proposed offer prior to a vote.

Fission's share price will be tied at the hip to Paladin until such time as the deal is accepted/rejected by Fission $FCU shareholders at a meeting that's at least a month away requiring a super majority of 67% to pass.

Unlike a cash deal, this offer is meant to be attractive to long term investors who, if the deal is approved, will end up owning shares in a major revenue-generating producer/developer with tremendous leverage to a rising Uranium price. The 30% premium just sets the starting point for Fission shareholders in a US$3.5B combined Paladin entity that should offer a lot of upside potential after the deal closes.

If U see the combined major producer/developer Paladin as having the potential to double its share price when Uranium prices surge higher in the coming year then this deal, if accepted, provides a pathway for Fission shareholders to see their $FCU shares provide a double on top of the 30% premium they receive in the deal... delivering a C$2.50 to $3.00 value on the $FCU shares they hold today if they continue to hold Paladin shares after the deal closes.

In terms of the development of PLS, the deal significantly de-risks the project by providing means to fund mine construction from Paladin's cash flow and its superior ability to access debt financing, something that Fission will face major challenges as a standalone entity. Fission shareholders, under this deal, would avoid the high share price volatility and risk that would come as Fission tries to raise the necessary capital to move PLS into production.

There's a lot to digest and plenty of time to weigh the pros and cons of this deal as shareholders wait to see if other superior bids materialize as the offer heads to an acceptance vote. I look forward to reading the analysis of the deal by others in the uranium space.

For me it feels like deja vu as a holder of Hathor $HAT when a bidding war erupted between Cameco and Rio Tinto in 2011. I see significant potential for other potential buyers to now take a look at this deal and dig deeper into the upside potential being offered by PLS. This is especially true with regards to next door neighbour NexGen $NXE which was highly anticipated to be merged with Fission at some point before both projects move to production. Time will tell how this story unfolds.

Here's the timeline and Hathor's associated $HAT share price as that 2011 bidding war saw $HAT rise from $1.54 after Fukushima to a final cash sale at $4.69 per share. That deal took place after the 2007 Uranium bull market had ended and Fukushima had created a bear market for uranium. In this new bull market I see potential once again for some major share price appreciation for Fission shareholders if such a bidding war were to erupt in the coming months. Lots to think