Australia鈥檚 Paladin Energy (ASX: PDN) has in its proposed acquisition of Canada鈥檚 Fission Uranium (TSX: FCU) after a Chinese investor in the takeover target opposed the deal.聽
The Western Australia-based miner that CGN Mining Company, a subsidiary of China General Nuclear Power with a 11.26% stake in Fission, .
Paladin moved in June to buy the Canadian miner for C$1.14 billion ($845 million), contingent on at least two-thirds of Fission shareholders voting in favour of the transaction by Aug. 26.聽
The bid came amid the global shift towards nuclear energy that took off a year ago, when a supply crisis unfolded and utilities sought to secure long-term contracts, driving the spot price to a 16-year high in January.
The company, which would have become the聽third-largest publicly traded uranium producer with the planned acquisition, failed to reach that threshold as nearly half of eligible shareholders did not submit their proxies by the deadline. A special general meeting was postponed to Sept. 9, in which 67.9% of聽Fission鈥檚 shareholders .
Paladin Energy鈥檚 intended acquisition of Fission Uranium comes amid the global shift towards nuclear energy that took off a year ago, which triggered a supply crisis and drove the spot price to a 16-year high in January.
The matter is now before the Supreme Court of British Columbia, which will issue a final ruling on the acquisition. The court proceedings began on September 13 and are scheduled to resume on September 26.
Paladin chief executive, Ian Purdy, says that Fission鈥檚 Patterson Lake South project in Saskatchewan, Canada, is a natural fit for the company. It provides medium-term development potential to complement production from the recently restarted Langer Heinrich Mine in Namibia, he says.
Closer to the US
Fission鈥檚 asset is also attractive because of its proximity to Paladin鈥檚 major customer, the United States, offering the chance to create a hub with Paladin鈥檚 existing tenement in Canada 鈥� .
The combined group would be worth $3.5 billion, hold dual listings in Australia and Canada, and churn out 10% of global uranium output.
Paladin has been hunting for growth options outside the home country, as Western Australia and Queensland ban uranium mining. The company believes there鈥檚 a shortage of primary production coming out of the ground and that the trend is set to continue.
鈥淲e鈥檝e seen very strong demand for our Langer Heinrich product. And we expect that when we鈥檙e ready to bring our customers to underpin PLS later this decade, that demand (will) be extremely strong,鈥澛燩urdy said during .
Paladin shares dropped on the news Monday, reaching an intra-day low of $8.97 on the ASX. The stock closed 1.81% down at A$9.20 per share, leaving the company with a market capitalization of A$2.75 billion ($1.86bn).