Vimy Resources Limited (ASX:VMY, OTCQB:VMRSF) has released the scheme booklet for its agreed scrip merger with Deep Yellow Limited (ASX: DYL, QTCQX: DYLLF) to create a leading ASX-listed uranium company.
The scheme booklet also contains the independent expert’s report, prepared by Deloitte, which declared the proposed merger with Deep Yellow as “fair and reasonable and in the best interests of Vimy shareholders”.
Vimy directors have recommended their shareholders to vote in favour of the Deep Yellow deal at a scheme meeting on July 20.
Under the terms of the agreed deal, which is to be completed via a Deep Yellow takeover of Vimy, Vimy shareholders will receive 0.294 Deep Yellow shares for every one of theirs. Post-merger, Vimy shareholders will control 47% of the enlarged Deep Yellow.
Writing in the scheme booklet, Vimy chair Cheryl Edwardes said:
“The Board unanimously recommends that Vimy shareholders vote in favour of the scheme, in the absence of a superior proposal and the independent expert continuing to conclude that the scheme is in the best interests of Vimy shareholders.
“The Vimy board believes the scheme will provide Vimy shareholders with a number of benefits including:
- the creation of a leading ASX-listed pure-play uranium company leveraged to meet the need for clean base load power supporting decarbonisation;
- creation of a significant uranium company with geographic diversification across two Tier-1 uranium jurisdictions (Australia and Namibia);
- increased scale, liquidity and capital markets profile, driving enhanced financial flexibility and the potential for further share price re-rating over time;
- the merged group will have a highly prospective growth pipeline, with an enhanced financial position to optimise and potentially accelerate development;
- the implied value of the scheme consideration represents a premium to the recent trading price of Vimy shares prior to the announcement of the scheme; and
- a thorough competitive market sounding process has been undertaken and your Vimy directors have determined the proposal from Deep Yellow to be the most compelling currently available.”
Adding his voice to the proposed deal, Deep Yellow chair Chris Salisbury wrote in the scheme booklet:
“The proposed merger with Vimy is the first major transaction in the uranium sector since 2012 and the strategic importance of this transaction cannot, in our view, be underestimated.
“At a time when the importance of nuclear energy in the green energy mix is growing rapidly, a well-credentialled company with a diverse asset base places the merged group in a strong position when compared to its peers.
“It represents a first step in the consolidation of the uranium sector required to deliver long-term sustainable supply.
“This highly strategic proposed transaction will allow the merged group to leverage Deep Yellow’s proven development, construction and operational expertise to unlock the development potential of the Mulga Rock project. This, together with the development of Deep Yellow’s Tumas project in Namibia, will position the merged group to rapidly advance its pipeline of near-term production opportunities.
“Combining the strong and proven management and technical staff of Deep Yellow with the existing Vimy organisation will consolidate the capability to bring both projects online.
“This sector-defining transaction is expected to deliver significant benefits, and, importantly, place the merged group in a strong position to create long-term wealth.”