After the markets closed yesterday, rare earths miner Molycorp Inc. (NYSE: MCP) announced that it had agreed to acquire Toronto-listed Neo Materials Technologies Inc. for CDN$1.3 billion, or about CDN$11.30/share, a 40% premium to the stock’s closing price. Neo Materials is an ore-processing and product design company with operations and sales channels in 11 countries, including China.
The acquisition has spurred hopes for more of the same in the rare earths sector. Molycorp competitors Avalon Rare Metals Inc. (AMEX: AVL), Rare Element Resources Ltd. (AMEX: REE), and China Shen Zhou Mining & Resources, Inc. (AMEX: SHZ) are all getting a share price boost today.
Rare Element Resources is up nearly 15% at $5.87 in a 52-week range of $3.08-$16.55.
Avalon is up more than 4% at $2.89 in a 52-week range of $2.29-$10.11, and China Shen Zhou is up more than 8% at $1.58 in a 52-week range of $0.97-$6.62.
The Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) is up more than 4% at $17.51 in a 52-week range of $13.82-$28.91.
And not to forget the driver: Molycorp is more than 12.5% at $29.25 in a 52-week range $23.05-$79.16.