UEC announced on June 13 an all-scrip bid of 0.0831 of one UEC share in exchange for each outstanding UEX share. It provides an implied consideration of C$0.43 per UEX share, which is a 50% premium to its last trading day close.

Canaccord Genuity Capital Markets analyst Katie Lachapelle views the development as a general positive for Denison, given they were considered the logical buyer of UEX.

She expects Denison to bid enough to comfortably cover the break fee plus a minimum 5% premium to shareholders, or likely more. “Despite having a strong balance sheet of C$59 million cash and C$155 million in physical uranium, we expect Denison’s proposal to be an all-share transaction,” said Lachapelle in a research note.

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

“Importantly, an acquisition of UEX would allow Denison to consolidate 100% ownership in our flagship Wheeler River project at an ideal time. [It comes] ahead of the anticipated final technical de-risking steps associated with the feasibility study in progress for the planned Phoenix in-situ recovery operation,” said Denison president and CEO David Coates in a press statement.