Shareholders of Canadian rare earths processor Neo Material Technologies Inc., unanimously approved the takeover bid by Molycorp on Thursday, creating the industry's first integrated mines-to-magnets supplier.
Under the terms of the deal Neo Material stockholders had the option to either receive cash or shares in Molycorp, but so many chose the former option that it exceeded the maximum cash amount that could be paid out to them. Neo Material shareholders will now receive 75c on the dollar.
Not exactly a ringing endorsement of the Colorado-based miner destined to become the number one producer of the 17 elements outside China.
Other investors are also voting with their feet.
On Tuesday long-suffering Molycorp shareholders received something of a fillip after an analyst upgrade but all the gains had been wiped out by the close Thursday. After falling 3.5% on Wednesday, Molycorp closed down 2.5% today after touching a new 52-week low in morning trade.
Molycorp shares hit a 2012 high of $34.71 on enthusiasm over the ground-breaking deal with Neo Material announced in March that apart from advanced rare earth processing capabilities also gave it access to a sales channel into China, the world's number one REE consumer.
But that euphoria has now evaporated as REE prices in China collapse and consumers in the automotive, high tech and green energy industries scramble to find alternatives.
Tuesday's decline brings Molycorp's losses over the past 12 months to the wrong side of 70%. The counter hit a high of $77.54 on May 3 2011, but at under $2 billion is now worth less than a third of that in New York.
