Will Peak Rare Earths Shareholders Approve Shenghe’s $195M Takeover Bid?
Peak Rare Earths Limited shareholders are set to vote on Shenghe Resources’ $195 million acquisition offer, which includes a 32% premium over recent share prices. Despite a higher unsolicited bid from GICP, the board recommends accepting Shenghe’s proposal.
- Shenghe Resources proposes $195 million acquisition via scheme of arrangement
- Offer price of $0.443 per share reflects 32% premium over recent trading price
- Competing $240 million bid from GICP deemed incomplete and risky
- Independent Board Committee unanimously supports Shenghe’s scheme
- Transaction awaits shareholder, Tanzanian regulatory, and court approvals
Background to the Scheme
Peak Rare Earths Limited (ASX, PEK) convened a pivotal Scheme Meeting on 16 September 2025, inviting shareholders to consider a proposed acquisition by Shenghe Resources (Singapore) Pte. Ltd. The deal, structured as a scheme of arrangement, values Peak at approximately A$195 million, offering shareholders a cash consideration of $0.443 per share. This represents a significant premium over Peak’s recent share prices, including a 32% uplift compared to the closing price before the revised offer was announced.
Originally, Peak had been pursuing a joint venture with Shenghe Resources focused on the Ngualla Rare Earth Project in Tanzania. However, geopolitical and regulatory challenges complicated that path, prompting both parties to explore alternative transaction structures that would provide greater certainty and a more definitive outcome.
The Revised Offer and Competing Proposal
On 5 September 2025, Peak announced an amended Scheme Implementation Deed increasing the offer price from $0.359 to $0.443 per share. This adjustment reflects Shenghe’s commitment to securing the acquisition and underscores the strategic value of Peak’s rare earths assets.
Shortly before the Scheme Meeting, Peak received an unsolicited, non-binding Letter of Intent from GICP, a US-based asset manager, proposing a $240 million acquisition, equivalent to $0.545 per share. Despite the higher headline price, the Peak Independent Board Committee, supported by financial and legal advisers, concluded that GICP’s proposal lacked sufficient detail, was highly conditional, and carried significant execution risks, particularly regarding due diligence, regulatory approvals in Tanzania, and funding certainty.
Board and Independent Expert Endorsements
The Independent Board Committee, excluding one director overseas, unanimously recommends shareholders vote in favor of the Shenghe Scheme. This recommendation is bolstered by an Independent Expert report from RSM Corporate Australia Pty Ltd, which affirms that the Scheme is fair and reasonable and in the best interests of shareholders not associated with Shenghe.
The Committee’s endorsement comes with a balanced view, acknowledging potential disadvantages but ultimately concluding that the advantages of the Scheme outweigh the risks. The Committee also notes that no superior proposal has emerged beyond the GICP bid, which it has formally rejected.
Conditions and Next Steps
The Scheme’s implementation remains subject to several key conditions, including shareholder approval at the Scheme Meeting, regulatory clearance from the Tanzanian Fair Competition Commission, and final approval from the Supreme Court of New South Wales. Other customary conditions have been satisfied or are expected to be met ahead of the Second Court Hearing.
Shareholders will now weigh the merits of a guaranteed premium offer against the uncertainties of alternative bids. The outcome will shape the future ownership and development trajectory of the Ngualla Rare Earth Project, a strategically important asset in the global rare earths supply chain.
Bottom Line?
As Peak shareholders prepare to vote, the decision will signal market confidence in Shenghe’s bid and set the tone for rare earths sector consolidation.
Questions in the middle?
- Will regulatory approvals in Tanzania be granted smoothly and on schedule?
- Could GICP or another bidder emerge with a more compelling offer before the Scheme is finalized?
- How will Shenghe’s full ownership impact the development and commercialization of the Ngualla Project?
