Denison Mines Corp. (TSX:DML)(NYSE Amex:DNN) has announced that it has entered into a Bid Implementation Agreement with White Canyon Uranium Limited under which Denison has agreed to make a takeover offer to acquire 100% of the issued and outstanding shares of White Canyon (TSX VENTURE:WU)(ASX:WCU) at a price of AU$0.24 per share for a total consideration of approximately AU$57 million (CDN$56.6 million).
The offer reflects a premium of approximately 20% to the closing price of White Canyon shares on the Australian Securities Exchange on February 18, 2011 (the last trading day in White Canyon shares prior to this announcement) and premiums of 23% and 51% to volume weighted average prices for White Canyon shares in the previous 30 and 90 trading days, respectively.
Denison believes that the acquisition of White Canyon will fit well into its U.S. growth strategy. Ron Hochstein, Denison's President and Chief Executive Officer, stated that "the acquisition provides Denison additional control over its milling schedules and uranium production and will establish Denison in a new, fourth mining district, near its White Mesa mill, which has significant potential for immediate resource growth."
White Canyon's directors have unanimously recommended that shareholders accept the Denison offer in the absence of a superior proposal and subject to an independent expert not opining that the Denison offer is not fair and not reasonable. White Canyon's directors have also unanimously indicated that they intend to accept the Denison offer in respect of any shares in White Canyon that they own or control (subject in each case to there being no superior proposal and subject to an independent expert not opining that the Denison offer is not fair and not reasonable). The Bid Implementation Agreement also provides that White Canyon cannot solicit other offers during the offer period and that a break fee of AU$500,000 is payable by either party to the other under specified circumstances. White Canyon has engaged PKF Corporate Advisory (East Coast) Pty Ltd. as an independent expert to opine on whether the Denison offer is fair and reasonable to White Canyon shareholders.
Additionally, Denison has entered into a Pre-Bid Acceptance Deed with Michael Shumway, the Operations Manager of White Canyon and substantial shareholder, agreeing to accept the Denison offer, or any improvement of the Denison offer, in the absence of a superior offer and subject to an independent expert not opining that the Denison offer is not fair and not reasonable. This acceptance of the Denison offer is with respect to those shares in White Canyon held by Michael Shumway that represent 19.9% of the fully diluted shares of White Canyon.
Denison's offer is subject to a number of conditions, including the requirement that Denison acquires a relevant interest in at least 90% of White Canyon's share capital on issue during, or at the end of, the offer period, receipt of all necessary regulatory approvals and there being no material adverse change or prescribed occurrence in respect of White Canyon. The Bidder's Statement to White Canyon's shareholders is expected to be available within 3 to 4 weeks.
White Canyon is a Perth, Western Australia headquartered company, with listings on both the Australian Securities Exchange and Toronto Venture Exchanges. White Canyon's U.S. operations are based in Moab, Utah and its holdings comprise 100% interests in the advanced Thompson, Daneros, Lark Royal, Geitus, Blue Jay and Marcy Look Projects, covering approximately 15,500 acres in the Red Canyon district, Southern Utah. White Canyon commenced uranium production in December 2009 from its 100% owned Daneros Uranium Mine, which uranium is currently processed at Denison's nearby White Mesa mill pursuant to a toll milling arrangement.
Cormark Securities Inc. served as financial advisor to Denison on the acquisition.
Source: Denison Mines Corp.