Among the key news on Australian stocks, Base Resources Limited (AU:BSE) shares rallied by 116%, as of writing, after the company announced its acquisition deal with Energy Fuels, Inc. (NYSE:UUUU) at a substantial premium of 188% over the last closing price. The board of Base Resources agreed to the deal and recommended that its shareholders vote in favour of it.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Base Resources is a mineral sand producer and developer headquartered in Australia, with a primary focus on Africa. The company holds assets in Kenya and Madagascar.
What’s in it for Base Resources’ Shareholders?
As part of the deal, Energy Fuels will acquire 100% of the issued shares of Base Resources at AU$0.302 per share, for a total consideration of $375 million. This represents a significant premium of 188% over the last closing price for Base’s shareholders. The deal value includes 0.0260 Energy Fuels common shares for Base Resources shareholders, along with an unfranked special dividend of AU$0.065. After the deal is completed, shareholders of Base Resources will collectively hold approximately 16.4% of the merged entity.
With this deal, Base Resources will have a robust platform for funding and advancing its Toliara Project in Madagascar. The company’s Toliara project is recognized as a world-class heavy mineral sand project. The project also boasts substantial quantities of Monazite, which is crucial for electric vehicles (EVs) and various clean energy technologies. As per the agreement, the future monazite production from the project will undergo processing at Energy Fuels’ operational White Mesa mill located in the U.S.
Base Resources will retain responsibility for managing the development of its Toliara Project.
The deal is expected to be completed by the third quarter of 2024, dependent upon necessary approvals.
Is Base Resources a Good Buy?
According to TipRanks’ consensus, BSE stock has a Moderate Buy rating based on two Buy recommendations. The Base Resources share price target is AU$0.61, which is around 176% above the current trading level.
