The Paladin Energy Ltd (ASX: PDN) share price is under pressure on Wednesday morning.
At the time of writing, the ASX 200 uranium stock is down 1% to $11.66.
Why is the Paladin Energy share price rising?
Investors have been selling the uranium producer's shares this morning following the release of an update on its proposed acquisition of Fission Uranium Corp. (TSX: FCU) by way of a plan of arrangement under the Canada Business Corporation Act.
It notes that completion of the deal remains subject to closing conditions, including receipt of a final order approving the arrangement from the Supreme Court of British Columbia and Investment Canada Act clearance.
Last week it announced that CGN Mining Company, a subsidiary of China General Nuclear Power Corp, which owns an 11.26% stake in Fission Uranium, opposed the takeover and was seeking to block the deal. The court is expected to deliver its decision in the coming weeks.
But a second spanner has been thrown into the works today, casting further doubts on Paladin Energy being able to get the deal over the line.
According to the release, Paladin has received a notice from the Minister of Innovation, Science and Industry.
That notice reveals that the Minister is ordering a national security review of the arrangement under section 25.3 of the Investment Canada Act (ICA). Accordingly, consideration of the arrangement under the ICA has been extended and remains ongoing.
Paladin Energy notes that it is considering the Minister's notice, exploring its available options, and evaluating the prospects of obtaining ICA clearance in respect of the arrangement.
What is Fission Uranium?
In June, Paladin Energy announced a deal to acquire Fission Uranium via an all-scrip deal with an implied equity value of C$1,140 million (A$1,220 million).
It is an award-winning Canadian uranium project developer and 100% owner of the Patterson Lake South uranium property. This is a proposed high-grade uranium mine and mill in Canada's Athabasca Basin region.
Paladin Energy's CEO, Ian Purdy, believes Fission Uranium would be a natural fit for its portfolio. He said:
The acquisition of Fission, along with the successful restart of our Langer Heinrich Mine, is another step in our strategy to diversify and grow into a global uranium leader across the top uranium mining jurisdictions of Canada, Namibia and Australia. Fission is a natural fit for our portfolio with the shallow high-grade PLS project located in Canada's Athabasca Basin. The addition of PLS creates a leading Canadian development hub alongside Paladin's Michelin project, with exploration upside across all Canadian properties.
Time will tell if the deal gets over the line.
