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Peak Rare Earths (ASX:PEK) shareholders on the HotCopper forums were almost universally pleased on Friday after the company confirmed it had worked out a better takeover deal than originally received from Singapore-based Shenghe Resources, with the latter now acquiring 100% of Peak at a 32% premium.
The deal overall implies the company is worth just shy of $200M and in that regard shares jumped to reflect the price intraday Friday. Earlier versions of the deal had not, in the eyes of many users, reflected a fair value for the company that four years ago briefly surpassed $1/sh during the heady lockdown years.
For its part, the company’s management team seem to realise this is probably, as long as rare earth prices stay where they are, the best deal that’s going to manifest at this current time.
“The Peak Independent Board Committee unanimously recommends that shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the Scheme is in the best interests of Peak shareholders not associated with Shenghe,” the company wrote on Friday.
Rare earth prices are currently to the chagrin of many investors and miners, though not traders who have been throwing money at companies since US-based MP Materials saw the US government buy-in, and at the same time, offer a price floor for key rare earth metals. The possibility (or hope) that Canberra may do the same has kicked off a wild run for some REE players on the bourse down under.
PEK last traded at 42cps.
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