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Uranium Producer Energy Fuels to Buy Miner Uranerz
By Simon Casey - Jan 5, 2015, 9:52:57 AM
(Bloomberg) -- Energy Fuels Inc. agreed to acquire Uranerz Energy Corp. for about $150.6 million, consolidating two uranium producers amid a prolonged slump in the price of the nuclear fuel.
Investors will get 0.255 of a share of Energy Fuels, the second-largest supplier of U.S. uranium, for each share of Uranerz, the companies said today in a statement. The offer represents a 37 percent premium to Casper, Wyoming-based Uranerz’s Jan. 2 closing price. After the takeover is complete, Energy Fuels shareholders will own about 45 percent of the company and Uranerz investors the rest.
Both companies have posted losses over the past 12 months. The price of uranium has dropped more than 25 percent since the March 2011 earthquake and tsunami that hit Japan, leading to a meltdown at the Fukushima Dai-Ichi nuclear power plant and the suspension of the country’s other reactors. Four U.S. reactors shut in 2013 because they weren’t profitable or needed costly repairs.
“Given the depressed state of the global uranium market, we expect management teams have been actively assessing combinations and think this could jump-start a sector that is ripe for further M&A,” Daniel W. Scott and Bryan C. Bergin, analysts at Cowen & Co., said today in a note.
Uranerz announced in September that it sold the first uranium from its Nichols Ranch mine in Wyoming. Toronto-based Energy Fuels accounts for about 20 percent of U.S. uranium production from its White Mesa mill in Utah.
Shares of Uranerz rose 2.6 percent to $1.18 in New York while Energy Fuels dropped 15 percent to C$6.25 in Toronto.
To contact the reporter on this story: Simon Casey in New York at scasey4@bloomberg.net
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Tina Davis, Steven Frank
