Denison Mines Corp. (DNN,DML.TO) announced Tuesday that it intends to make a takeover bid to acquire all of the outstanding shares of Rockgate Capital Corp. (RGT.TO) in exchange for shares of Denison. As per the terms of the offer, each Rockgate common share will be exchanged for 0.192 of a common share of Denison with an implied value of C$0.23 per Rockgate share and a total purchase price for all outstanding Rockgate shares of approximately C$26.7 million.
The Offer represents a 47% premium over the closing price of Rockgate shares on the Toronto Stock Exchange on September 16, 2013, the last trading day prior to Denison's announcement of its intention to make the Offer and a 38% premium to both companies' trailing 20-day volume-weighted average prices.
Denison said it has entered into lock-up agreements covering 20.38 million Rockgate shares, representing 17.4% of Rockgate's total shares outstanding. Under the lock-up agreements, the shareholders have agreed, among other things, to tender their Rockgate shares to the Offer.
The Offer will remain open until 4:00 p.m. Toronto time on October 25, 2013, unless otherwise withdrawn or extended by Denison.
Separately, Denison said it has been advised by shareholders holding 31.5% of the shares of Rockgate, including the shareholders who have signed lock-up agreements, that they currently intend to vote against the proposed transaction between Rockgate and Mega Uranium Ltd. (MGA.TO) that was announced on June 6, 2013.
Sprott U.S. Holdings, Inc., incorporating all US Sprott affiliates , has also advised Denison that it currently intends to recommend to its clients (who hold approximately 11.2% of the shares of Rockgate) that they vote against the Mega Transaction.
Upon the completion of the Offer, Denison intends to undertake an evaluation of the merits of a spin-out into a new company of Denison's African assets including its Mutanga development project in Zambia, its exploration joint ventures with Rio Tinto in Namibia, as well as Rockgate's Falea project in Mali.
On September 12, 2013, Leading independent proxy advisory firm, Glass Lewis & Co., LLC recommended that shareholders of Rockgate Capital Corp. vote FOR the plan of arrangement with Mega Uranium Ltd. to be voted on at Rockgate's special meeting of shareholders on September 25, 2013.
The proposed arrangement has also been endorsed by Institutional Shareholder Services (ISS), another leading independent proxy advisory firm."
On 6th June 2013, Mega Uranium Ltd. and Rockgate Capital Corp announced that they entered into a binding letter of intent to combine the two companies and create a diversified uranium company with advanced uranium assets in Australia and Mali, a pro forma cash balance of approximately C$22 million and a uranium-focused investment portfolio valued at approximately C$12 million.
As per the terms of the Merger, Mega will acquire all of the issued and outstanding common shares of Rockgate. Rockgate shareholders will receive 2.2 common shares of Mega for each Rockgate common share held which represents a premium of approximately 36% to the 20-day volume weighted average trading price for the Rockgate shares on the TSX of C$0.19 as of June 5, 2013.
On 14th August 2013, Mega Uranium Ltd. and Rockgate Capital Corp. announced that they entered into a definitive arrangement agreement with respect to their merger previously announced on June 6, 2013.
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