Peak Rare Earths (ASX:PEK) entered into a binding agreement with shareholder Ganzhou Chenguang Rare Earths New Material, a unit of China-based rare earth company Shenghe Resources, for AU$150.5 million, according to a Thursday filing with the Australian bourse.
Chenguang will acquire Peak for AU$0.359 per share in cash, representing a 199% premium to Peak's closing price on May 9, the filing said.
The deal is subject to shareholder approval, regulatory clearance, and an independent expert's assessment that the scheme is superior to Shenghe's proposed transaction with the company to develop the Ngualla Project in Tanzania.
Peak will also launch an entitlement offer to raise up to AU$7.5 million to fund ongoing activities, the filing added.
The acquisition is expected to close in the second half of the year.
Shares of the company rose 150% in recent Thursday trade and earlier hit a near 18-month high.
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