Titan Uranium signs merger deal with Uranium Power
2009-05-08 18:05 ET - News Release
Shares issued 98,240,160
UPC Close 2009-05-07 C$ 0.26
From News Release (C-TUE) Titan Uranium Inc
Mr. Brian Reilly of Titan Uranium reports
TITAN URANIUM INC. TO ACQUIRE URANIUM POWER CORP.
Titan Uranium Inc. and Uranium Power Corp. have entered into a definitive agreement pursuant to which Titan Uranium will acquire by way of a plan of arrangement all of the outstanding securities of Uranium Power. Upon completion of the transaction, existing Titan Uranium and Uranium Power shareholders will each own 50 per cent of the issued and outstanding shares of Titan Uranium, which will then own 100 per cent of Uranium Power.
The transaction is expected to result in a number of benefits arising from a combined asset portfolio, including the following:
Added scale and market presence in the uranium sector;
Potential near-term production profile;
A diversified uranium exploration portfolio in the U.S. and Canada and a roster of projects in various stages of development;
Combined management experience;
Greater financial strength.
The purchase price payable by Titan Uranium for each Uranium Power common share is anticipated to be 0.5378 common share of Titan Uranium, subject to adjustment to ensure that upon completion of the transaction each shareholder group will own 50 per cent of the issued and outstanding shares of Titan Uranium. Based on the closing prices of Titan Uranium's and Uranium Power's common shares on the TSX Venture Exchange on May 7, 2009, this offer represents a premium of 3.4 per cent to the Uranium Power shareholders on May 7, 2009, and 13.4 per cent to the Uranium Power shareholders, based on the 10-day volume-weighted average trading price of both companies' shares on the TSX Venture Exchange.
"This strategic acquisition creates a stronger company with diversified assets in various stages of exploration and development and a larger treasury," stated Brian Reilly, president of Titan Uranium. "Our objective is to enhance shareholder value and we believe the combined entity is greater than the sum of its parts to the benefit of both Titan and UPC shareholders. We plan to build on the synergies and opportunities presented by the transaction. Titan is well-positioned for future growth in a uranium sector with very solid market fundamentals."
Chris Healey, president of Uranium Power, added: "We at UPC are excited at this opportunity to expand our exposure in the uranium business with the highly prospective Athabasca and Thelon projects in Titan's portfolio. An additional attraction is that these projects are well funded by major industry players."
J. Allan McNutt, PGeo, MASc, is Titan Uranium's qualified person (as defined by National Instrument 43-101) for uranium projects and is responsible for the technical information contained in this release.
Transaction details
The transaction has been structured as a plan of arrangement under the Business Corporations Act (British Columbia) and was unanimously approved by the board of directors of both companies. Shareholders of Titan Uranium, representing 26 per cent of Titan Uranium's issued and outstanding shares, and of Uranium Power, representing 7 per cent of Uranium Power's issued and outstanding shares, have entered into voting support agreements pursuant to which they have agreed to support, and vote in favour of, the transaction.
The transaction is subject to satisfaction of a number of closing conditions, including the receipt of required regulatory approvals (including of the TSX Venture Exchange), court approvals, and the approval of shareholders of Uranium Power holding at least two-thirds of the common shares of Uranium Power represented at a special meeting of shareholders of Uranium Power to be called to consider the transaction. The definitive agreement contains a reciprocal break fee in the amount of $100,000, which is payable in certain circumstances if the transaction is not completed. The definitive agreement also provides that Uranium Power will call and hold a special shareholder meeting no later than July 24, 2009, or such other date as may be agreed to by the parties, for the purposes of considering the transaction. If all necessary approvals are obtained and the conditions contained in the definitive agreement are satisfied, Titan Uranium and Uranium Power expect that the transaction will close on or about July 31, 2009.
After closing of the transaction, Titan Uranium is expected to have approximately 106 million common shares issued and outstanding, with current Titan Uranium shareholders owning 50 per cent and current Uranium Power shareholders owning 50 per cent.
Management
Upon completion of the transaction, the executive management team of the combined entity will comprise: Mr. Reilly (president and chief executive officer), Mr. Healey (chief operating officer) and Kelly McShane (chief financial officer).
It is anticipated that the board of directors of the combined entity will include one nominee of each of Titan Uranium and Uranium Power, and one director nominated by Mega Uranium Inc., which is a significant shareholder. The remaining two nominees shall qualify as independent directors of the combined entity under securities laws.
Financial advisers
Titan Uranium's financial adviser is Deloitte & Touche LLP. Uranium Power's financial adviser is Canaccord Adams. Canaccord has rendered an opinion, dated May 8, 2009, that as of the date of the opinion and subject to the qualifications and limitations set forth therein, the consideration offered pursuant to the transaction is fair, from a financial point of view, to the Uranium Power shareholders. Deloitte has rendered an opinion, dated May 8, 2009, that as of the date of the opinion and subject to the qualifications and limitations set forth therein, the consideration offered pursuant to the transaction is fair, from a financial point of view, to the Titan Uranium shareholders.
The opinions of Canaccord and Deloitte have been accepted by each of the respective boards in determining that the purchase price payable to Uranium Power shareholders is fair and in the best interest of the shareholders of each of Titan Uranium and Uranium Power.
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