Peak shareholders to receive cash as Shenghe scheme becomes effective
ASX-listed Peak Rare Earths on Friday confirmed that the Supreme Court of New South Wales has approved the proposed acquisition of the company by Shenghe Resources (Singapore), clearing the final condition for the deal to proceed.
Peak said it would lodge the Court’s orders with the Australian Securities and Investments Commission later on Friday, at which point the scheme of arrangement would become legally effective. Peak’s shares are expected to be suspended from trading on the ASX at the close of trade the same day, with payment to shareholders due on September 30.
Under the transaction, Shenghe will acquire all Peak shares it does not already hold for no less than $0.443 a share in cash, valuing the rare earths developer at about A$195-million.
The court approval follows confirmation from the Tanzanian Fair Competition Commission and the Tanzanian Mining Commission earlier this week that they consented to the acquisition, satisfying the key regulatory approvals in that country, where Peak is developing its Ngualla rare earths project.
Peak has rejected a higher, but non-binding, approach from US-based General Innovation Capital Partners, citing a lack of detail and certainty, and reaffirmed that Shenghe’s “best and final” offer remains in the best interests of shareholders.
CEO Bardin Davis recently told investors that the scheme followed a lengthy evaluation of funding options for Ngualla, noting that Shenghe had initially considered a joint venture before shifting to a whole-of-company acquisition to provide greater certainty.
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