By Alex MacDonald
LONDON--U.K.-listed Indonesian coal miner Bumi PLC (BUMI.LN)
said Wednesday that it will be considering each of three
transactions proposed by the Bakrie family on their own merits and
will refrain from making a recommendation until a probe into
financial irregularities at its Indonesian assets is well
advanced.
Bumi's board of directors received last week an offer from the
powerful Indonesian Bakrie family to end their ties with the
company by buying out its Indonesian assets for $1.2 billion and
cancelling the family's stake in the London-listed company. The
deal would end a tumultuous period in which Bumi's board members
pitted themselves against each other over corporate governance rows
that caused the company's shares to plunge.
The proposal put forth by Long Haul Holdings Ltd, a unit of the
Bakrie family, involves three deals. The first two are focused on
buying out Bumi's 29% stake in Indonesia's largest coal miner PT
Bumi Resources TBk (BUMI.JK) in which the Bakrie family has a
significant interest. The third deal is focused on acquiring Bumi's
majority stake in Indonesia's fifth largest coal miner PT Berau
Coal Energy TBk (BRAU.JK).
Bumi said in a statement that its independent non-executive
directors will be considering each of the three deals on their own
merits and would be evaluated on the basis of their value for
shareholders and ability to deliver. Analysts have questioned
whether the debt-laden Bakrie Group would have the ability to fund
the purchases.
"We have appointed Rothschild Group, acting as an unconnected
and independent financial adviser, to evaluate each of these
proposals, on which the Board has not yet formed a view," said
Julian Horn-Smith, the company's Senior Independent Director.
"Our objective is to ensure all shareholders are treated fairly
and we will update the market as soon as practicable," he
added.
Bumi was created in June 2011, when Bakrie family coal assets
were folded into European financier Nathaniel Rothschild's
investment firm, then called Vallar. The venture has struggled for
much of its life. Its share price plummeted by more than 70% since
its listing price of GBP 10 ($16.09) as coal prices fell, the
Bakrie Group struggled with debt and Mr. Rothschild and other
investors criticized the company's accounting standards in
Indonesia. The latest flare-up came in September, when Bumi PLC
launched a probe into possible financial irregularities at Bumi
Resources.
Bumi said that the independent probe is still underway and the
board won't make a recommendation until the investigation is
"appropriately advanced." U.K. law firm Macfarlanes, which has been
appointed to carry out the investigation, declined to comment.
A person familiar with the matter said Bumi's board could
receive an independent valuation on the first deal as early as
Friday and said the probe would take several weeks to complete.
The first deal would involve the Bakrie family giving up its
23.8% stake in London's Bumi in return for a 10% stake in
Indonesia-listed Bumi Resources that would be carved out of Bumi
PLC's stake of about 29% in Bumi Resources. In the second proposal,
the Bakrie Group would buy Bumi PLC's remaining 18.9% stake in the
Indonesian unit for $278 million. In the third phase, the Bakrie
Group would buy Bumi PLC's other mining asset, an 85% stake in PT
Berau Coal Energy, for about $950 million.
At 1431 GMT, Bumi's shares were up 1.9% at 245 pence a share.
The shares have risen nearly 40% since the day prior to when the
Bakries publicly announced their offer.
(Eric Bellman contributed to this story.)
Write to Alex MacDonald at alex.macdonald@dowjones.com
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