Deep Yellow digs in for Vimy Resources bid; all scrip offer Anthony Macdonald, Sarah Thompson and Kanika Sood
Mar 28, 2022 – 9.50am
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John Borshoff’s Deep Yellow’s finally made its move on fellow uranium play Vimy Resources.
Uranium sector executive John Borshoff. Photo: Bohdan Warchomij
Both companies’ shares went into a trading halt on Monday morning, citing potential change of control transactions.
The transaction under discussion is an all-scrip bid for Deep Yellow to acquire Vimy.
Sources said the discussions were well advanced, although it could take another day or two for the parties to agree on the final terms.
Putting the two together could help Borshoff create a uranium miner of scale, worth about $700 million on a market capitalisation basis and getting Deep Yellow closer to its goal of producing 10 million pounds of uranium a year.
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Vimy Resources
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Vimy owns the Mulga Rock project in Western Australia, located east of Kalgoorlie. It is pitched as one of the country’s largest undeveloped uranium resources. It also has projects in the Northern Territory and Canada.
Deep Yellow, run by former Paladin Energy boss Borshoff out of Perth, has assets in Namibia.
The potential tie-up has been on analysts minds for the past few weeks. Capital markets are open for uranium players, and Deep Yellow’s clear it has wanted to add some Australian assets to its portfolio.
The new offer comes only four months after Deep Yellow walked away from talks with Vimy, citing “limited engagement”. That deal would’ve seen Vimy shareholders receive one Deep Yellow share for every 3.74 Vimy shares.
Aitken Murray, Houlihan Lokey and Gilbert + Tobin advised Deep Yellow on the previous offer, and are expected to feature again this time.
Macquarie is in Vimy’s camp.
L4L
VMY Price at posting:
24.0¢ Sentiment: Buy Disclosure: Held
