UPDATE 3-Denison, Fission cancel merger as investor support falls short

(Adds Fission CEO's comments, updates stock trading)
By Sneha Banerjee and Rod Nickel
Oct 13 (Reuters) - Canadian uranium companies Denison Mines
Corp DML.TO and Fission Uranium Corp FCU.TO said on Tuesday
they have terminated their C$483 million ($371.71 million)
merger agreement due to opposition from Fission's shareholders.
While a majority of the Fission shares voted were in favor
of the purchase by Denison, the required two-thirds approval was
not obtained, the companies said in a statement.
"A lot of people who own our stock tend to be the type who
want a home run, not a single," Fission Chief Executive Dev
Randhawa said in an interview. "They feel combining it with
another company dilutes the story."
Cantor Fitzgerald analyst Rob Chang said some Fission
shareholders did not support the combination because it lacked
operational synergies. They viewed Denison's assets as lower
quality than Fission's Patterson Lake South project in northern
Saskatchewan, he added.
Randhawa said he does not expect a revised offer from
Denison.
Fission's shares jumped 5.8 percent, or 4 Canadian cents, to
73 cents in Toronto, while Denison's stock gained 1.5 percent,
or 1 Canadian cent, to 68 cents.
Fission will continue drilling at Patterson Lake, viewed by
some as the best undeveloped uranium deposit in the world, and
resume its search for a strategic investor, Randhawa said.
At the deadline for submission of proxies on Friday,
Denison's shareholders strongly supported the arrangement.
Both companies have canceled the shareholders' meetings
scheduled for Wednesday.
Up to Friday's close, Denison Mines' shares had declined 9.4
percent since the announcement of the deal, while Fission
Uranium's stock had lost nearly a third of its value.
Denison Mines agreed to buy Fission Uranium in July to
create a diversified uranium company in a strong position in the
Athabasca Basin in northern Saskatchewan through Fission's
Patterson Lake South Project and Denison's Wheeler River
Project. urn:newsml:reuters.com:*:nL1N0ZM2ES
The combined company, which was to be named Denison Energy
Corp, was expected to be equally owned by shareholders of both
the companies.
($1 = 1.2994 Canadian dollars)