Herald Resources accepts Bumi offer
January 23, 2008 - 3:32PM
The board of takeover target Herald Resources Ltd have unanimously
recommended that shareholders accept the all-cash takeover offer from
Indonesia's PT Bumi's subsidiary Calipso.
The offer is $2.25 cash per Herald share, valuing the target at $444.8
million, and is subject to PT Bumi shareholder approval at a meeting on January
29.
Herald, a gold and base metals miner, has a current market capitalisation of
$432.9 million.
However, the offer is far from a done deal.
Herald says it is in discussions with several interested parties involving
management presentations and visits to Herald's Dairi zinc-lead project in
Sumatra.
As such, Herald has urged shareholders who intend to accept the Calipso offer
to hold off until near the end of the offer period.
We hope to be in a position to report back to shareholders on these
discussions before the expiry of the Calipso offer, Herald said in a statement.
Among several conditions, the Calipso offer is subject to a 50.1 per cent
minimum acceptance level.
In Herald's target statement, directors said the offer undervalued the
company.
In light of the recent market turmoil and after considering the uncertainty
of forestry approval for the Dairi project being granted in the short term,
they now believe accepting the offer is in the best interests of shareholders.
The $2.25 offer, being a cash offer, provides Herald shareholders with
certainty in a time of high volatility in world financial markets, the company
said.
However, Herald said it was making efforts to attract a higher offer from
possible third parties.
Calipso holds 38.7 million Herald shares and has received acceptances for a
further 76,445 shares, giving it a 19.65 per cent stake in its target.
On January 7, Bumi said it could use a Credit Suisse debt facility of up to
$US375 million ($A432.4 million) to partially fund the proposed acquisition.
At the time, Bumi said it was able to meet its funding obligations as it had
a market capitalisation of $US12.4 billion ($A14.3 billion) as at the end of
last year, net assets of $US890 million ($A1.02 billion) at the end of the
September quarter, and a proven track record of raising debt expeditiously.
Shares in Herald were one cent higher to $2.18 at 1529 AEDT Wednesday.
www.herald.net.au/
Dedy Sutendy [EMAIL PROTECTED] wrote:
'Some Japanese utilities have also agreed with Indonesia's Bumi Resources
BUMI.JK to buy 2008 coal supplies at about $85 a tonne in November.'
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