Board Unanimously Recommends Transaction
TORONTO, Jan. 14, 2013 /CNW/ - Uranium One Inc. ("Uranium One" or the
"Company") today announced that it has entered into a definitive
agreement (the "Arrangement 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
(the "Plan of Arrangement"). ARMZ and its affiliates currently own
51.4% of the Uranium One common shares ("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 CDN$2.86 per share. The cash consideration represents
a 32% premium to the 20-day volume weighted average price of the Common
Shares on the Toronto Stock Exchange for the period ending January 11,
2013. The transaction provides total consideration to minority shareholders of
approximately CDN$1.3 billion and implies an equity value for Uranium
One of approximately CDN$2.8 billion.
The Board of Directors of Uranium One has unanimously (with Messrs.
Jivov, Sattler and 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 (the "Independent
Committee"), and after consideration of the advice of legal and
financial advisors 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 advisor 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 ("MI 61-101"). GMP Securities L.P. 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 US$2.66 to US$3.21 (equivalent to CDN$2.62 to CDN$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
(the "Special Meeting") expected to be held in March 2013. As the
transaction will constitute a "business combination" for the purposes
of MI 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 66⅔% 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 CDN$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 aggregate principal amount of
7.5% (re-set to 5%) convertible unsecured subordinated debentures due
March 13, 2015 (the "Debentures") as prescribed by the terms of the
Debentures. The completion of the transaction is not dependent on any
approval from the Debenture holders 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 advisor, 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 the Canadian
SEDAR website at www.sedar.com.
About Uranium One
Uranium One is one of the world's largest publicly-traded uranium
producers with a globally diversified portfolio of assets located in
Kazakhstan, the United States, Australia and Tanzania. ARMZ and its
affiliates currently are Uranium One's largest shareholder, owning
approximately 492.2 million (approximately 51.4% of the outstanding) common shares of
Uranium One.
Cautionary Statement
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
Investors are advised to refer to independent technical reports
containing detailed information with respect to the material properties
of Uranium One. These technical reports are available under the profile
of Uranium One Inc. at www.sedar.com. Those technical reports provide the date of each resource or reserve
estimate, details of the key assumptions, methods and parameters used
in the estimates, details of quantity and grade or quality of each
resource or reserve and a general discussion of the extent to which the
estimate may be materially affected by any known environmental,
permitting, legal, taxation, socio-political, marketing, or other
relevant issues. The technical reports also provide information with
respect to data verification in the estimation.
Forward-looking statements:
This press release contains "forward-looking statements" within the
meaning of applicable securities laws that are intended to be covered
by the safe harbours created by those laws, including statements that
use forward-looking terminology such as "may", "will", "expect",
"anticipate", "believe", "continue", "potential", or the negative
thereof or other variations thereof or comparable terminology. Such
forward-looking statements may include, without limitation, statements
regarding the completion of the proposed transaction and other
statements that are not historical facts. While such forward-looking
statements are expressed by Uranium One, as stated in this release, in
good faith and believed by Uranium One to have a reasonable basis, they
are subject to important risks and uncertainties including, without
limitation, approval of applicable governmental authorities, required
Uranium One securityholder approval and necessary Court approvals, the
satisfaction or waiver of certain other conditions contemplated by the
Arrangement Agreement, and changes in applicable laws or regulations,
which could cause actual results to differ materially from future
results expressed, projected or implied by the forward-looking
statements. As a result of these risks and uncertainties, the proposed
transaction could be modified, restructured or not be completed, and
the results or events predicted in these forward-looking statements may
differ materially from actual results or events. These forward-looking
statements are not guarantees of future performance, given that they
involve risks and uncertainties. Uranium One is not affirming or
adopting any statements made by any other person in respect of the
proposed transaction and expressly disclaims any intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except in
accordance with applicable securities or to comment on expectations of,
or statements made by any other person in respect of the proposed
transaction. Investors should not assume that any lack of update to a
previously issued forward-looking statement constitutes a reaffirmation
of that statement. Reliance on forward-looking statements is at
investors' own risk.
For further information about Uranium One, please visit www.uranium1.com.
SOURCE: Uranium One Inc.
