Kraken Energy (UUSA.C) found a relatively elegant way to solve its issues as the company agreed to merge with Aero Energy (AERO.V), which has assets in Canada’s Athabasca Basin.
Every share of Kraken Energy will be converted into 0.97037 shares of Aero Energy, representing a 20% premium to the 15 day VWAP of Kraken’s share price. As Kraken has been quite dormant after multiple delays waiting for the permits to drill its flagship Apex Uranium project in Nevada (with those drill permits still about six months away), this is an elegant solution to combine two early stage exploration companies and hopefully increase the odds to continue to find funding for its exploration activities.
The transaction is expected to close in June of this year and we will tender our shares (sitting on a substantial loss) to Aero Energy.
Disclosure: The author has a long position in Kraken Energy, but no position in Aero Energy. Please read the disclaimer.
