China's Shenghe Resources to buy Australia's Peak Rare Earths for about $97 million
May 15 (Reuters) - Peak Rare Earths (PEK.AX), opens new tab said on Thursday that Chinese rare earths producer Shenghe Resources (600392.SS), opens new tab will acquire the Australian firm for A$150.5 million ($96.62 million), in addition to the full amount raised under Peak's proposed A$7.5 million entitlement offer.
Under the deal, the Chinese miner's unit Ganzhou Chenguang Rare Earths New Material will buy Peak for a minimum of A$0.359 per share in cash, if the entitlement offer is raised in full.
The offer price represents a 199% premium to Peak's last closing price, which sent the shares up 150% to A$0.3 in early trading.
Shenghe Singapore already owns about 19.8% of the Australia-listed rare earths firm and has the rights to buy, opens new tab all of the rare earths concentrate from Peak's Ngualla Project in Tanzania.
"We are also mindful of the importance to Tanzania of developing the Ngualla Project and believe that Shenghe is well positioned to partner with the Government of Tanzania to successfully develop this world-class project," Peak Chairman Russell Scrimshaw said in a statement.
The deal is subject to a shareholder vote and approval from regulatory bodies in China, Tanzania, and Australia.
($1 = 1.5576 Australian dollars)
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