Uncertainty Looms as Peak Rejects Higher Bid, Eyes Shenghe Scheme Approval
Peak Rare Earths Limited held a pivotal scheme meeting on 16 September 2025 to approve Shenghe Resources’ $195 million acquisition offer, which includes a 23% premium on the original proposal. Despite a higher unsolicited bid, the board recommends shareholders back Shenghe’s cash deal.
- Shenghe Resources proposes $195 million acquisition via scheme of arrangement
- Offer represents 23% increase from original proposal and 32% premium to recent share price
- Independent Board Committee unanimously recommends voting in favor
- Unsolicited higher bid from GICP rejected due to insufficient details and risks
- Transaction subject to shareholder, regulatory, and court approvals, expected by September end
Background to the Scheme
Peak Rare Earths Limited (ASX – PEK) convened a critical scheme meeting on 16 September 2025, inviting shareholders to vote on the proposed acquisition by Shenghe Resources (Singapore) Pte. Ltd. The transaction values Peak at approximately A$195 million, reflecting a significant 23% uplift from the original offer and a substantial premium to recent trading prices. This move follows a strategic shift from an earlier joint venture plan to a full acquisition via a scheme of arrangement, aiming to provide greater certainty for the Ngualla Rare Earth Project in Tanzania.
The Offer and Board Endorsement
The revised offer translates to a cash consideration of no less than $0.443 per Peak share, representing a 32% premium to the closing price before the increased offer announcement. The Independent Board Committee, supported by an independent expert report from RSM Corporate Australia, unanimously recommends shareholders vote in favor of the Scheme. The expert concluded the offer is fair and reasonable, particularly for shareholders not associated with Shenghe.
Competing Proposal and Rejection
On the eve of the meeting, Peak received an unsolicited, non-binding offer from US-based asset manager GICP, valuing the company at A$240 million or $0.545 per share. However, the Peak board dismissed this bid as incomplete and highly conditional, citing insufficient due diligence, lack of regulatory clarity, and no demonstrated funding capability. Shenghe’s existing 19.7% stake and opposition to the GICP proposal further diminished its viability.
Conditions and Next Steps
The Scheme’s implementation remains contingent on several key approvals, including shareholder endorsement, regulatory clearance from the Tanzanian Fair Competition Commission, and court approval from the Supreme Court of New South Wales. The transaction timetable anticipates completion by the end of September 2025, pending these conditions. Shareholders are urged to weigh the certainty of Shenghe’s cash offer against the risks of market volatility and the uncertain prospect of a superior proposal.
Implications for Peak and Its Shareholders
If approved, the acquisition will consolidate Shenghe’s control over Peak and its flagship Ngualla Rare Earth Project, potentially accelerating development with secured funding. For shareholders, the deal offers a premium exit price and liquidity, but also closes the door on future upside as an independent listed entity. The board’s recommendation and expert opinion provide strong guidance, yet the final vote and regulatory outcomes remain pivotal.
Bottom Line?
As Peak shareholders decide on Shenghe’s premium cash offer, the coming weeks will reveal whether certainty or speculation shapes the company’s rare earths future.
Questions in the middle?
- Will the Tanzanian regulatory approvals be granted without delay?
- Could any new competing bids emerge before the Scheme becomes effective?
- How will Shenghe’s full ownership impact the development timeline of the Ngualla Project?
