Shenghe Raises Peak Offer by 23% to A$0.443 Per Share
Peak Rare Earths has secured an increased cash offer from Shenghe Resources, valuing the company at A$195 million. An independent expert confirms the revised scheme remains fair and reasonable for shareholders.
- Shenghe raises cash consideration to at least A$0.443 per Peak share
- Independent expert RSM Corporate Australia affirms scheme’s fairness
- Peak Independent Board Committee unanimously recommends voting in favour
- Scheme subject to shareholder and court approvals, meeting set for 16 September
- Amended deed poll executed to reflect increased consideration
Background to the Scheme
Peak Rare Earths Limited (ASX – PEK), an Australian rare earths miner, has announced a significant update to its proposed acquisition by Shenghe Resources (Singapore) Pte. Ltd. The original scheme of arrangement, first unveiled in May 2025, offered Peak shareholders a cash consideration valuing the company at approximately A$158 million. This has now been revised upwards to A$195 million, reflecting a 23% increase in the minimum cash consideration payable per share.
Independent Expert Confirms Fairness
To ensure impartiality, Peak appointed RSM Corporate Australia Pty Ltd as an independent expert to assess the merits of the scheme. After reviewing the revised proposal and recent developments in the global rare earths market; including regulatory changes in China, US government interventions, and geopolitical tensions; RSM reaffirmed its opinion that the scheme remains fair and reasonable to shareholders not associated with Shenghe. This endorsement is crucial, as it supports the scheme’s integrity amid a volatile sector.
Board Support and Shareholder Implications
The Peak Independent Board Committee has unanimously recommended shareholders vote in favour of the scheme, provided no superior proposal emerges and the independent expert maintains its positive view. Notably, the committee members intend to vote their own shares in favour, signaling strong internal confidence. The final cash consideration per share will be confirmed once the scheme becomes effective, factoring in any changes to Peak’s fully diluted issued capital, including potential lapsing of performance rights which could slightly increase the per-share payout.
Next Steps and Legal Framework
The scheme remains subject to shareholder approval at a meeting scheduled for 16 September 2025 and subsequent court approval. Shenghe has executed an amended deed poll to formalise the increased consideration, reinforcing its commitment to the transaction. Peak shareholders are encouraged to seek professional advice and consider the detailed scheme booklet and notices provided by the company. The transaction, if completed, will see Shenghe acquire 100% of Peak’s shares, with Peak subsequently delisting from the ASX.
Market Context and Sector Outlook
This development comes at a time of heightened interest in rare earths, critical components in clean energy technologies and advanced electronics. Regulatory moves in China to control mining output, alongside US government support for domestic rare earth production, have created a complex but potentially lucrative environment. Peak’s increased valuation reflects these dynamics and the strategic value Shenghe sees in consolidating its position in the sector.
Bottom Line?
As the shareholder vote looms, Peak’s revised scheme offer sets the stage for a pivotal moment in Australia’s rare earths landscape.
Questions in the middle?
- Will any rival bidders emerge to challenge Shenghe’s increased offer?
- How might shifts in rare earth pricing impact the scheme’s valuation post-approval?
- What are the implications for Peak’s performance rights holders under the scheme?
