Russia’s state corporation Rosatom has paid 30% above market price to take over completely Canadian uranium producer, Uranium One.
The uranium extraction company ARMZ (Effective Energy N.V.), a wholly owned subsidiary of Russia’s nuclear energy corporation Rosatom, is to pay almost $2.8 billion for 48.6% of Uranium One Inc. The second-largest uranium producer in Canada agreed to the sale on Monday.
The shares themselves are worth about $1.3 billion, but the deal provides for a 32% premium on the 20-day volume weighted average price of the common shares on the Toronto Stock Exchange for the period ending January, 11.
Even with a premium that high the deal is a valuable long-term investment for ARMZ, FK BKS expert Oleg Petropavlovsky told Gazeta.ru.
“Since the Fukushima disaster in 2011 shares of Uranium One lost almost two thirds of their value: then they cost $6.8 each, now its $2.41,” Petropavlovsky said.
ARMZ was already the largest shareholder in Uranium One owning 51.4% of the company.
Head of ARMZ board of directors Vadim Zhivov explained that the deal is a friendly one and was unanimously approved by the independent members of Uranium One board of directors.
The proposed acquisition provides for a non-solicitation covenant from Uranium One and ARMZ with a "right to match". It also requires Uranium One to pay a termination fee of over $45 million in certain circumstances.
A special committee of independent directors of Uranium One said that the deal is in the best interests of the company and is fair to its shareholders.