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Uranium Energy wins race for UEX after sweetening bid

By acquiring UEX, Denison Mines would have consolidated a 100% ownership of its flagship Wheeler River project, pictured, of which it currently owns 95%. (Image courtesy of UEX Corporation.)

Uranium Energy Corporation (NYSE American: UEC) has trumped Denison Mines’ (TSX: DML) competing bid for Canada’s UEX Corporation (TSX: UEX) after sweetening its original bid.

The revised offer gives each holder of UEX shares 0.0890 of one common share of Uranium Energy for each UEX share held. This implies a consideration of about C$0.49 per UEX share, versus the prior offer of $0.43 per share, a 13.95% price increase.

The Texas-based uranium company had approached UEX Corporation in June, but saw its offer weakened after Canada’s Denison Mines presented a rival offer.

By acquiring UEX, Denison would have consolidated a 100% ownership of its flagship Wheeler River project, of which it currently owns 95%.

“While it is puzzling that the UEX board was not compelled by the premium offer made by Denison, we are nevertheless happy to see exploration assets in the Athabasca Basin so coveted by other industry participants,” David Cates, CEO of Denison Mines, said announcing his company’s offer for UEX had expired.

Uranium Energy Corporation and UEX said in their joint statement that the combined company would be “unique”, as it will have near-term production capacity at the Wyoming and Texas Hubs, a solid long-term uranium production pipeline and the ability to continue to grow its resource base through continued exploration in the Athabasca Basin and in the US.

UEX shareholders are set to vote on the transaction tomorrow at a special meeting. If approved, the transaction is expected to close by mid month, subject to regulatory approvals.