Forsys Metals Corp said on Tuesday it has terminated its agreed C$579 million ($504 million) takeover by holding company George Forrest International Afrique (GFI) after the buyer failed to transfer funds to complete the deal.
Toronto-based Forsys, which is developing the Valencia uranium project in Namibia, said it is now reviewing its strategic options, including seeking project financing, joint venture partners, or another buyer for the company.
The decision follows months of delays and speculation as to the identity of GFI's financing partners, and will render moot a surprise intervention by Industry Canada, which said last week it would delay the deal until further notice.
Forsys and GFI were originally supposed to have closed their agreement in February, but the deal has been repeatedly delayed as Belgian-based GFI has asked for more time to complete financing and transfer the funds.
In a statement, Forsys said its board had determined it was no longer in the best interests of the company to grant any further extensions. It said it has demanded GFI pay it an agreed C$20 million reverse break fee.
It is disappointing that after all of the support and assistance that the company has given to GFI over the last several months, during very difficult economic conditions, that this transaction could not finally be completed, Forsys Chief Executive Duane Parnham said.
Shares of Forsys were halted for the entire Toronto trading session.
The stock jumped 36 percent on Aug. 4 after Forsys said it had been told GFI had entered into binding investment arrangements to secure funding.
But it gave up most of those gains last week after Industry Canada put the deal on hold for an undisclosed reason.
Some analysts have speculated that Industry Canada's decision may have been fueled by concerns that a GFI financial backer may be a country, such as Iran or North Korea.
(Reporting by Cameron French; editing by Rob Wilson)