Rey Resources Faces Delisting Risk as Vigorous Resources Seeks Full Control

Background and Offer Details

On 8 July 2025, Vigorous Resources Pty Ltd announced an unconditional off-market takeover bid to acquire all ordinary shares of Rey Resources Limited (ASX – REY) at a cash price of $0.028 per share. This offer represents a substantial premium of approximately 155% to the last closing price and 160% to the 30-day volume weighted average price of Rey shares prior to the announcement.

Vigorous Resources currently holds a 16.10% stake in Rey and intends to fund the bid through a $5 million unsecured loan from major shareholder Ms Wanyan Liu. The offer period is set to open on 9 July and close on 11 August 2025, subject to extension or withdrawal at the bidder's discretion.

Compelling Case for Shareholders

The offer is unconditional, providing shareholders with immediate cash certainty, a key consideration given Rey's current financial position. Rey operates at a loss and carries significant debt, including a $22.2 million loan from Ms Liu maturing in April 2026 with a 12% interest rate. The bid eliminates future exposure to market volatility and company-specific risks, which the bidder highlights as a strong incentive for shareholders to accept.

Importantly, the Rey Board has unanimously recommended the offer in the absence of any superior proposal, signaling confidence in the bid's value proposition. Vigorous Resources also notes the low likelihood of competing offers, given its existing substantial shareholding.

Strategic Intentions and Potential Outcomes

Should Vigorous Resources acquire 90% or more of Rey's shares, it intends to compulsorily acquire the remaining shares and seek to delist Rey from the ASX. The bidder has expressed intentions to maintain Rey's current business operations and key management team, aiming for continuity while supporting future growth.

However, the bidder has not conducted due diligence on non-public information, and certain material contracts held by Rey may contain change of control provisions that could be triggered by the takeover, potentially impacting the company’s operations or contractual relationships.

Tax and Regulatory Considerations

The bidder has provided detailed guidance on the Australian tax implications for shareholders, including capital gains tax considerations and foreign resident capital gains withholding tax, which may reduce net proceeds for non-resident shareholders. No stamp duty or brokerage fees will be incurred by shareholders accepting the offer directly.

Vigorous Resources has obtained all necessary regulatory approvals, and the offer is not subject to any financing conditions, underscoring the bidder’s preparedness to complete the transaction.

Next Steps for Shareholders

Shareholders are encouraged to carefully review the bidder’s statement and the forthcoming target’s statement from Rey before making a decision. Acceptance requires shareholders to tender all their shares, with payment expected within 21 days after the offer closes or one month after acceptance.

The offer provides an immediate liquidity event at a significant premium, but shareholders must weigh this against potential future upside from Rey’s exploration assets in Western Australia’s Canning Basin and ongoing projects such as the Duchess Paradise Coal Project.