Denison Mines Corp. (DML), a Canadian uranium producer, rose the most in three months after analysts said an agreement to sell U.S. assets may make it a more attractive acquisition target.
Denison surged 17 percent to C$1.65 at the close in Toronto, where the company is based. It was the biggest gain since Jan. 16 for Denison, which has risen 30 percent this year.
The company agreed yesterday to sell its U.S. mining assets to Energy Fuels Inc. (EFR) in an all-share transaction valued at C$106.3 million ($107.5 million) based on yesterday’s prices. Denison will still have assets in Canada, Zambia and Mongolia.
“The trimmed down Denison may be more attractive as an acquisition target post the transaction,” Edward Sterck, an analyst at BMO Capital Markets in London, said in a note today.
Senior uranium producers will be “very interested” in Denison’s Canadian assets, including its 22.5 percent stake in Areva SA (AREVA)’s McClean Lake mill in Saskatchewan, Adam Schatzker, a Toronto-based analyst at RBC Capital Markets, said in a note.
“Denison’s U.S. assets acted as a poison pill for potential acquirers,” he wrote.
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