UEC Uranium Energy Corp

 

 

On August 8, 2022, Uranium Energy Corp. (the “Company” or “UEC”) issued a joint news release with UEX Corporation (“UEX”) to announce that they have entered into an amending agreement (the “Amending Agreement”) to the previously announced arrangement agreement dated June 13, 2022, as amended June 23, 2022, among UEX, UEC and the UEC 2022 Acquisition Corp., pursuant to which UEC will acquire all of the issued and outstanding common shares of UEX (the “UEX Shares”) by way of a statutory plan of arrangement (the “Arrangement”) under the Canada Business Corporations Act (the “Transaction”).

 

Under the terms of the Amending Agreement, holders of UEX Shares (“UEX Shareholders”) will now receive 0.0890 of one common share of UEC (a “UEC Share”) for each UEX Share held, implying consideration of approximately C$0.49 per UEX Share based on the closing price of UEX Shares and UEC Shares on the Toronto Stock Exchange and the NYSE American Exchange, respectively, and the spot exchange rate as of August 5, 2022. The Amending Agreement also increases the termination fee (to be paid by UEX to UEC if the Transaction is terminated in certain specified circumstances) by 7%, which is an increase proportional to the percentage increase in the offered exchange ratio under the Amending Agreement. Other than the foregoing, the terms of the Transaction remain unamended.

 

Amir Adnani, President and CEO of UEC, commented: “We are pleased to have come to an agreement with UEX and look forward to completing this Transaction following the UEX Shareholder vote tomorrow. As mentioned previously, the acquisition is expected to double UEC’s uranium resources¹ at only 14.2% dilution to existing UEC Shareholders. Completion of this Transaction will create the largest, diversified North American focused uranium company with 100% unhedged production. Roger Lemaitre and the UEX team have done a remarkable job assembling and advancing a highly prospective portfolio and UEC is looking forward to working with their experienced Canadian team to unlock additional value for shareholders.”

 

Roger Lemaitre, President and CEO of UEX, commented: “We look forward to tomorrow’s Meeting where shareholders will have the opportunity to vote on the amended UEC-UEX arrangement. We believe the combined companies will become the ‘go-to’ name in the uranium industry. The combined company would be unique, possessing a strong balance sheet, near-term production capacity at the Wyoming and Texas Hubs, a solid long-term uranium production pipeline, the ability to continue to grow its resource base through continued exploration in the Athabasca Basin and its U.S. properties, and the opportunity to extract additional value by holding one of the largest property portfolios in the industry.”

 

The terms of the Amending Agreement were agreed following receipt by UEX of a competing acquisition proposal on July 28, 2022 for all of the issued and outstanding UEX Shares.

 

 

¹ Subject to the completion of technical report summaries by UEC following closing of the proposed acquisition of UEX.

 

Board of Directors’ Recommendations

 

The Amending Agreement has been unanimously approved by the Board of Directors of UEX who continue to recommend that UEX Shareholders and holders of options and restricted share units of UEX (collectively, the “UEX Securityholders”) vote in favour of the Transaction. The Amending Agreement has also been unanimously approved by the Board of Directors of UEC.

 

 

Full details of the Transaction are included in the management information circular of UEX dated July 8, 2022 (the "Circular"). The Transaction will be subject to the approval of at least (i) 66 2/3% of the votes cast by UEX Shareholders, and (ii) 66 2/3% of the votes cast by UEX Securityholders, voting together as a single class, at the special meeting of UEX Securityholders which will continue to be held on Tuesday, August 9, 2022, at 10:00 a.m. (Vancouver time) at the Metropolitan Hotel, 645 Howe Street, Vancouver, British Columbia (the “Meeting”).

 

If the UEX Securityholders approve the Arrangement at the Meeting, it is currently anticipated that the Arrangement will be completed in by mid-August, subject to obtaining court approval, stock exchange approval and certain required regulatory approvals, as well as the satisfaction or waiver of other conditions contained in the Arrangement Agreement.

 

On completion of the Arrangement, former UEX Shareholders are expected to hold approximately 14.2% of the outstanding UEC Shares (based on the issued and outstanding UEC Shares as of the date hereof).

 

None of the securities to be issued pursuant to the Transaction have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and any securities issuable in the Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

 

UEX Securityholders who have questions regarding the Transaction should contact Laurel Hill Advisory Group by telephone at 1-877-452-7184 (North American Toll Free) or 1-416-304-0211 (Outside North America), or by email at assistance@laurelhill.com.

 

A copy of the news release is attached as Exhibit 99.1 hereto.

 

 

 

Not applicable.