Lynas Wins Backing From UBS and Jefferies as Meteoric Deal Redraws Its Growth Map

UBS and Jefferies reaffirmed Buy ratings on Lynas Rare Earths, lifting shares 2.3% after its near-A$1 billion Meteoric Resources acquisition drew early selling.

Two of the Street's heavyweight research desks threw their weight behind Lynas Rare Earths on Friday, giving shareholders a reason to exhale after a bruising stretch. UBS kept its "Buy" rating on the Australian rare earths producer with a price target of A$21.00, while Jefferies reaffirmed its own "Buy" call and a A$18.00 target the same day. The twin endorsements helped lift the stock 2.3%, sending it out at EUR 8.05 at the close of trading.

The rebound marked a sharp turn from the reception the company's expansion plans had received just days earlier. Lynas confirmed on Thursday a binding agreement to acquire 100% of Meteoric Resources, a deal carrying a total value of just under A$1 billion. Under the terms, Meteoric shareholders would receive 0.0207 Lynas shares for each share they hold, in an all-scrip transaction that values the target at roughly A$968 million on a fully diluted basis. Lynas also committed up to A$110 million in bridge financing.

Why the Market Balked First

Investors initially balked at the proposal, with Reuters reporting that the announcement day brought steep losses. Two concerns drove the selling: fears of equity dilution from the share-based structure, and the scale of development spending that the Caldeira project will demand. The deal hands Lynas a foothold in Brazil's rare earths landscape, but it also puts a substantial capital burden on the buyer at a moment when the market is watching costs closely.

The recovery in Friday's session suggests shareholders are beginning to weigh the strategic logic of the move rather than its near-term price tag. The company, backed by Gina Rinehart, is pressing ahead with its expansion agenda despite the cost worries that briefly weighed on the stock.

A Deal With Conditions Attached

Closing the transaction is far from a formality. A joint presentation from the two mining companies lays out a series of conditions that must be satisfied. A pivotal one is approval under Brazil's regime for critical and strategic minerals, should that framework apply to the transaction. Meteoric's shareholders must also formally approve the scheme, and court sign-offs are mandatory before the deal can be finalized.

The parties have mapped out firm milestones for the process. The scheme booklet for shareholders is slated for publication in December 2026, setting the stage for the decisive Meteoric shareholder vote in January 2027. Barring delays, full completion of the acquisition is targeted for March 2027.

Chart Still Under Pressure

Even with Friday's advance, the technical picture for the rare earths producer remains strained. At the closing price, the stock trades below its 50-day moving average of EUR 9.27. Investors now face a waiting game stretching toward early 2027, with the twin questions of how Lynas will clear the remaining regulatory hurdles and how it will fund the project's development hanging over the shares.