ASX-listed Peak Rare Earths has rejected an unsolicited approach from US-based General Innovation Capital Partners (GICP), reaffirming its support for a proposed A$195-million takeover by Shenghe Resources.

Peak said on Tuesday that its independent board committee had reviewed the conditional, non-binding letter of intent (LoI) received from GICP on September 14, which proposed acquiring all shares in Peak for about A$240-million, or no less than $0.545 a share.

However, the board determined that the proposal did not constitute, and could not reasonably be expected to become, a superior offer under the terms of the company’s scheme implementation deed with Shenghe.

Peak cited a lack of quantitative and qualitative information from GICP, uncertainty around due diligence and Tanzanian government approvals, the absence of transaction structure or funding evidence, and Shenghe’s stated unwillingness to support the rival approach.

“Accordingly, Peak will not be further engaging with GICP,” the company said, noting that the LoI has since expired.

The company confirmed that the transaction with Shenghe remains in full force and effect, with Peak’s board continuing to unanimously recommend the scheme in the absence of a superior proposal and subject to an independent expert’s positive opinion.

Speaking at a company meeting on Tuesday, CEO Bardin Davis said the Shenghe scheme followed a lengthy evaluation of funding options for the Ngualla rare earths project in Tanzania.

Davis outlined that Shenghe had originally been pursuing a joint venture, but that transaction structure shifted to a whole-of-company acquisition to provide greater certainty. The agreed scheme now values Peak at A$195-million, with shareholders to receive no less than $0.443 a share in cash.

“This represents a 23% increase on the original scheme proposal, a 32% premium to the pre-announcement share price, and a 269% premium to our share price prior to the original scheme announcement in May,” Davis said.

He confirmed Shenghe had declared the revised consideration to be its “best and final” offer, subject to no competing proposals emerging.

The independent expert, RSM Corporate Australia, has concluded the Shenghe scheme is fair and reasonable and in the best interests of shareholders not associated with Shenghe.

Remaining conditions include approval by Peak shareholders, Tanzanian Fair Competition Commission clearance, and Supreme Court of New South Wales approval. Subject to those approvals, the scheme is expected to become effective later this month.