Rey Resources Takeover Offer Values Shares at 2.8 Cents, Over 150% Premium

• Unconditional off-market takeover bid at $0.028 per share cash
• Offer represents over 150% premium to REY’s recent trading prices
• REY Board unanimously recommends acceptance absent a superior proposal
• Vigorous Resources holds 16.1% stake and may compulsorily acquire remaining shares at 90% ownership
• REY faces low liquidity, substantial debt, and risks if offer is rejected

Background to the Offer

On 8 July 2025, Rey Resources Limited (ASX, REY), an Australian energy exploration company focused on the Canning Basin, released its Target's Statement in response to an off-market takeover bid by Vigorous Resources Pty Ltd. The offer values REY shares at 2.8 cents each in cash, a substantial premium over the company's recent trading prices.

The bid, which opened on 9 July and is set to close on 11 August 2025, is unconditional and seeks to acquire 100% of REY's ordinary shares. Vigorous Resources currently holds a 16.1% stake in REY and is controlled by Ms Wanyan Liu, who is also a major lender to the company.

Board’s Unanimous Recommendation and Rationale

The REY Board has unanimously recommended shareholders accept the offer, provided no superior proposal emerges. The directors highlight several key reasons for their recommendation, the offer price represents a 154.55% premium to the closing price on 7 July 2025 and a 160.07% premium to the 30-day volume weighted average price; the offer is all cash, providing certainty and liquidity; and the company faces ongoing financial risks if the offer is rejected.

REY is currently operating at a loss with low cash reserves, approximately $125,730 as of early July, and substantial debt exceeding $22 million owed to Ms Liu under a loan agreement maturing in April 2026. The Board warns shareholders of the risks of remaining invested, including the potential dilution from future capital raises and the possibility of becoming minority shareholders with limited influence if Vigorous Resources gains control.

Risks and Considerations for Shareholders

While the Board supports the offer, it also outlines risks associated with accepting or rejecting it. Accepting the offer means shareholders cannot withdraw their acceptance, even if a better bid emerges later. Rejecting the offer exposes shareholders to the company's financial uncertainties, including the need for additional funding and the risks inherent in exploration and development activities in the energy sector.

Notably, REY has not commissioned an independent expert report to assess the offer's fairness, citing the Board’s experience and the prohibitive costs and delays such a report would entail. Shareholders are advised to seek independent financial, legal, and tax advice before deciding.

Next Steps and Market Implications

The offer period is open until 11 August 2025, with Vigorous Resources reserving the right to extend it. If Vigorous Resources acquires 90% or more of REY shares, it may compulsorily acquire the remaining shares and potentially delist REY from the ASX. This could lead to significant changes in corporate governance and strategic direction.

Investors and analysts will be watching closely to see the level of shareholder acceptance and whether any competing proposals emerge. The outcome will have implications for liquidity, valuation, and the future of REY’s exploration projects, including its interests in the Fitzroy Blocks, Derby Block, and the Duchess Paradise Coal Project.

Bottom Line?

Shareholders face a pivotal decision as Rey Resources offers a rare cash exit amid financial strain and takeover uncertainty.

Questions in the middle?

• Will any competing bids emerge to challenge Vigorous Resources’ offer?
• How will Vigorous Resources’ control impact REY’s strategic direction and project development?
• What are the detailed tax implications for different classes of shareholders accepting the offer?