Peak Rare Earths Faces Critical Vote as Shenghe Declares Best and Final Offer
Shenghe Resources has increased its cash offer to acquire Peak Rare Earths to A$195 million, representing a significant premium and a best and final proposal. The Peak Independent Board Committee unanimously recommends shareholders support the scheme, pending an independent expert's endorsement.
- Shenghe increases acquisition offer by 23% to A$195 million
- Revised cash consideration at least A$0.443 per Peak share
- Offer represents a 32% premium to recent trading price
- Peak Independent Board Committee unanimously backs the scheme
- No further increases expected unless a competing proposal emerges
Background to the Revised Offer
Peak Rare Earths Limited (ASX, PEK) has announced a material update to the proposed acquisition by Shenghe Resources (Singapore) Pte. Ltd. Shenghe has agreed to increase its cash consideration under the scheme of arrangement to value Peak at A$195 million, up from the original offer of approximately A$158 million announced in May 2025. This adjustment reflects a 23% uplift in the minimum cash consideration payable to Peak shareholders.
Details of the Revised Scheme Consideration
The revised proposal translates to a minimum cash payment of A$0.443 per Peak share, representing a 32% premium to Peak’s closing share price on 4 September 2025, just before the announcement. Compared to the share price before the original scheme announcement in May, this is a striking 269% premium. The final per-share consideration will be confirmed on the scheme’s effective date, depending on the fully diluted issued capital at that time, with potential for a slight increase if certain performance rights lapse.
Board and Shareholder Implications
The Peak Independent Board Committee has unanimously recommended shareholders vote in favour of the scheme, subject to the absence of a superior proposal and a positive independent expert opinion confirming the scheme is in shareholders’ best interests. Notably, the committee members intend to vote their own shares in favour, signaling strong internal confidence in the deal. Shareholders who have already submitted proxy forms have the option to revise their instructions in light of the improved offer.
Legal and Procedural Updates
The Scheme Implementation Deed and related documents have been formally amended to reflect the revised terms. Both parties have reaffirmed their commitments under the amended agreement, ensuring the transaction remains on track for court approval and shareholder consideration. Shenghe has declared this revised offer as its best and final, barring any competing bids emerging.
Market and Strategic Context
This enhanced offer comes amid growing interest in rare earths, critical components in advanced technologies and clean energy applications. Peak’s assets and strategic positioning have evidently attracted renewed valuation from Shenghe, a major player in the sector. The increased premium underscores the competitive value of Peak’s portfolio and the strategic importance of securing full ownership.
Bottom Line?
With the revised offer now set as final and the board’s strong endorsement, all eyes turn to shareholder votes and potential rival bids.
Questions in the middle?
- Will any competing proposals emerge to challenge Shenghe’s best and final offer?
- How will the independent expert assess the revised scheme’s value to shareholders?
- What impact might this acquisition have on Peak’s operational strategy post-completion?
