Australia's Peak Rare Earths picks $130 mln Shenghe takeover; rejects higher U.S. bid

Sept 16 (Reuters) - Australia's Peak Rare Earths PEK.AX said on Tuesday it approved a takeover by Chinese rare earths producer Shenghe Resources 600392.SS, choosing deal certainty with its top shareholder over a higher but conditional U.S. offer.

Under the agreement, Shenghe's Singapore unit will buy all Peak shares it does not already own for A$0.443 cash per share, valuing the miner at A$195 million ($129.9 million).

The Chinese company currently holds about a 19.7% stake in the Australian miner.

The approval came days after U.S.- based General Innovation Capital Partners (GICP) made an unsolicited, non-binding A$240 million bid but Peak rejected the bid earlier on Tuesday, citing lack of clarity on due diligence and execution.

Shenghe had said it would not support GICP's proposal.

Partly state-owned Shenghe raised its offer earlier this month, lifting it by more than 23% from mid-May . That would give it control of Peak's Ngualla project in Tanzania, one of the world's largest deposits of neodymium and praseodymium (NdPr), key for electric vehicles.

Shenghe has been expanding in Australia's rare earths sector, buying nearly 20% of Peak in 2022 and signing a deal that year to purchase Ngualla's products.

The deal comes as Canberra considers a price floor to support critical minerals projects and position itself as an alternative to China, the dominant supplier.

Peak shares rose 3.6% to A$0.435 by 0313 GMT, their highest in more than two years.

($1 = 1.5011 Australian dollars)