Rey Resources Limited has dispatched its Target's Statement recommending shareholders accept an unconditional $0.028 per share cash offer from Vigorous Resources Pty Ltd. The bid, which offers a significant premium over historical prices, opens on 9 July and closes on 11 August 2025.
- Unconditional off-market takeover offer at $0.028 per share
- Rey Resources board unanimously recommends acceptance absent a superior proposal
- Vigorous Resources holds 16.1% stake and may compulsorily acquire remaining shares at 90% ownership
- Offer provides liquidity and premium over Rey’s recent trading prices
- Significant financial risks disclosed including substantial loan from bidder’s controller
Overview of the Takeover Offer
Rey Resources Limited (ASX, REY), an Australian energy exploration company focused on the Canning Basin, has formally responded to an off-market takeover bid by Vigorous Resources Pty Ltd. The offer values Rey shares at $0.028 each in cash, representing a substantial premium over the company’s recent trading prices. The bid opened on 9 July 2025 and is scheduled to close on 11 August 2025, unless extended.
The Rey board has dispatched its Target's Statement to shareholders, which includes a unanimous recommendation from the directors to accept the offer in the absence of a superior proposal. The directors cite the certainty of cash value, the premium over historical share prices, and the risks of remaining a minority shareholder as key reasons for their endorsement.
Key Terms and Shareholder Recommendations
The offer is unconditional, meaning Vigorous Resources is not subject to any conditions precedent. Shareholders are invited to accept the offer for 100% of their shares, with no partial acceptances allowed. Vigorous Resources currently holds a 16.104% relevant interest in Rey, acquired prior to the bid, and has indicated it may compulsorily acquire remaining shares if it reaches 90% ownership.
Directors who hold shares intend to accept the offer, and the largest shareholder, ASF Group Limited, which holds over 16% of shares, has also expressed support. The board warns shareholders that declining the offer risks becoming a minority shareholder with limited influence and liquidity.
Financial and Operational Context
Rey Resources operates primarily in the Canning Basin with interests in petroleum exploration permits and the Duchess Paradise Coal Project. The company is currently operating at a loss, with low cash reserves and substantial debt, including a $22.26 million loan from Ms Wanyan Liu, who controls Vigorous Resources. This financial position underpins the board’s recommendation to accept the offer, providing shareholders with immediate liquidity and a premium price.
The Target's Statement details various risks associated with continuing as a Rey shareholder, including operational, market, regulatory, and financial risks. It also outlines the tax implications of accepting the offer, including capital gains tax considerations and potential withholding tax for foreign shareholders.
Next Steps for Shareholders
Shareholders are encouraged to carefully review both the Target's Statement and the Bidder's Statement before making a decision. Acceptance forms have been dispatched, and shareholders can accept the offer by following the instructions provided. The offer closes at 7, 00pm (AEST) on 11 August 2025, unless extended.
For those who do not accept, the board highlights the risk of compulsory acquisition if Vigorous Resources reaches the 90% threshold. Shareholders are advised to seek independent financial, legal, and tax advice to understand the implications fully.
Bottom Line?
As the offer period unfolds, shareholder acceptance rates and any emerging competing bids will be critical to determining Rey Resources’ future ownership and strategic direction.
Questions in the middle?
- Will any competing proposals emerge before the offer closes?
- How will Vigorous Resources’ control impact Rey Resources’ operational strategy?
- What are the detailed tax implications for foreign shareholders accepting the offer?