PERTH: Peak Rare Earths Limited (ASX: PEK) has entered into a binding agreement to be acquired by Ganzhou Chenguang Rare Earths New Material Co., Ltd., a wholly owned subsidiary of China’s Shenghe Resources Holding Co., Ltd., in a deal valued at approximately A$158 million (US$105 million).
Under the proposed scheme of arrangement, Chenguang will acquire 100% of Peak’s shares at A$0.359 per share, a 199% premium to Peak’s closing price of A$0.12 on May 9, 2025. The offer is subject to shareholder and regulatory approvals, including from Chinese and Tanzanian authorities.
Key Details of the Deal
– Total Consideration: A$150.5 million plus funds raised from a A$7.5 million entitlement offer to shareholders.
– Premium: 199% over Peak’s last closing price and 160% above its 20-day volume-weighted average price.
– Conditions: Requires 75% shareholder approval, regulatory clearances, and an independent expert’s confirmation that the deal is in shareholders’ best interests.
– Timeline: Shareholder vote expected in September 2025, with completion targeted by early October.
Shenghe, Peak’s largest shareholder with a 19.86% stake, already holds binding offtake rights to 100% of rare earth production from Peak’s Ngualla Project in Tanzania. The acquisition aims to streamline development of the project, which holds an estimated 84% interest for Peak, with the Tanzanian government retaining a 16% free-carried stake.
Peak’s Independent Board unanimously recommends the deal, citing a “superior outcome” compared to alternative funding options. CEO Bardin Davis called the offer “an excellent opportunity for shareholders to realize value.”
Peak will undertake a non-renounceable entitlement offer to raise A$7.5 million at A$0.10 per share, with Shenghe committing to its full entitlement of A$1.49 million. Proceeds will fund operations pending the deal’s completion.
The transaction is being advised by Macquarie Capital and Corrs Chambers Westgarth.
Peak is an Australian miner focused on the Ngualla Rare Earth Project in Tanzania, a key asset in the global supply of rare earth elements used in electric vehicles and renewable energy technologies.