March 7 Uranium One Inc shareholders
voted in favor of an offer from Russia's state-owned ARMZ to
take it private by buying the shares it does not already own.
About 96 percent of shareholders voted in favor of the
going-private transaction at a meeting on Thursday. The Russian
uranium company had agreed in January to pay C$1.3 billion to
take Uranium One private.
ARMZ already owns 51.4 percent of common shares in Uranium
One, Canada's second-largest uranium company. ARMZ is the mining
arm of Russia's nuclear regulator, Rosatom, which also builds
ARMZ still needs numerous regulatory approvals, Cantor
Fitzgerald analyst Rob Chang said.
Uranium One's operations are focused in Kazakhstan, where
ARMZ is also building up its asset base.
Kazakhstan is the world's top uranium producer, with more
than double the output of No. 2 producer Canada in 2011, data
from the World Nuclear Association showed. Its output quintupled
between 2004 and 2011.
The takeover, if successful, will help ARMZ consolidate its
control over uranium assets in the former Soviet Union, and
strengthen access to reserves in Australia and the United
It will also leave just two major publicly listed, pure-play
uranium producers - Canada's Cameco Corp and France's
Demand for uranium, used mainly as fuel for nuclear
reactors, has come under pressure since the March 2011
earthquake and tsunami in Japan triggered a meltdown at the
Fukushima-Daiichi atomic power plant.
The disaster led countries such as Germany and Japan to back
away from nuclear power.
Some say supply and demand fundamentals are looking more
favorable in the near future, with a major source of nuclear
fuel supply - a longstanding program to convert highly enriched
uranium from Russian warheads into reactor fuel - scheduled to
end later this year. Cameco also expects a net 91 new reactors
to be added worldwide by 2022.
Uranium One's privatization should lead to investors looking
for exposure to uranium moving their funds into Cameco, Chang
said in a note to clients. Other publicly traded uranium-focused
producers include Paladin Energy Ltd, Uranium Energy
Corp and Energy Fuels Inc.
Uranium One's shares were up about 1 percent at C$2.76 on
Thursday afternoon on the Toronto Stock Exchange.