By Alex MacDonald
LONDON--The U.K.'s takeover regulator said Wednesday it would
restrict the voting rights of key Indonesian shareholders in coal
mining company Bumi PLC (BUMI.LN), a move that could affect the
outcome of a shareholder battle over how to severe acrimonious ties
between Bumi and the powerful Indonesian Bakrie family.
More specifically, the U.K. Takeover Panel wanted to know why it
wasn't made aware that key founding shareholders had close ties to
each other at the time the deal was announced; it has launched a
separate investigation into the matter.
The U.K. Takeover Panel, which is responsible for ensuring fair
treatment for shareholders in takeover bids, determined that the
influential Bakrie Group was acting "in concert" with Bumi
co-founder and Indonesian shareholder Rosan Roeslani. It also said
that Bumi Chairman Samin Tan was also a concert party given his
joint investment in Bumi with the Bakrie family.
In light of such findings, the panel restricted the Indonesian
partners' voting rights to 29.9% of Bumi's outstanding shares even
though the three collectively own more than half of the company's
shares.
The Bakrie Group made it evident that they were dissatisfied
with the voting structure and have lodged a complaint with the
panel regarding financier and Bumi co-founder Nathaniel
Rothschild's conduct in orchestrating the 2010 reverse takeover
that resulted in Bumi's creation.
"As it now stands, we are caught in an unjust situation where
holders of some 57% of the equity in Bumi are currently (and
collectively) restricted to only 29.9% of the votes," the Bakrie
Group said.
By contrast, Mr. Rothschild "currently has some 14.7% of the
votes in circumstances where he only subscribed to some 3.16% of
ordinary shares," the group added. The conglomerate called on Mr.
Rothschild to give up his share bonus that he received upon
completing the deal.
Bumi's relationship with the Bakrie family began to fray soon
after its 2011 listing when boardroom spats over corporate
governance, falling coal prices, and an independent probe into
alleged financial irregularities prompted the company's shares to
plummet.
The dispute has claimed four board seats so far, including Mr.
Roeslani who resigned Wednesday after accepting the U.K. takeover
panel ruling that he was a concert party to the Bakrie family given
the structure of the original reverse takeover deal.
The Bakrie family offered in October to sever all ties by buying
all of Bumi's mining assets for about $1.2 billion plus their
shares in Bumi. Mr. Rothschild, a former Bumi board member and
large shareholder, submitted an alternative proposal that went
beyond the Bakrie proposal to remove all the key current Indonesian
shareholders from the company by injecting cash into Bumi.
Julian Horn-Smith, senior independent nonexecutive director,
said that after reviewing both proposals carefully, "only part of
the Bakrie proposal has support" since the board had no intention
of selling Bumi's 85% stake in Indonesian coal mining company PT
Berau Coal Energy TBk (BERAU.JK). He also noted that Mr.
Rothschild's "proposal is undeliverable," given that Mr. Tan and
Mr. Roeslani have said they had no intention to sell their
respective stakes to Mr. Rothschild.
Bumi said it continues to work toward separating Bumi from the
Bakrie family by selling its 29% stake in Indonesia's largest coal
mining company PT Bumi Resources TBk (BUMI.JK) to the Bakrie
family.
"We will put this to shareholders as soon as possible in 2013
and outline a clear vision for the Company going forward," Mr.
Horn-Smith said.
Meanwhile, Mr. Rothschild said he would continue pursuing
discussions with Bumi's three largest Indonesian shareholders, the
Bakrie family, Mr. Tan and Mr Roeslani, "in an attempt to reach a
consensual solution."
--Eric Bellman, I-Made Sentana and Edhi Pranasidhi contributed
to this article
Write to Alex MacDonald at alex.macdonald@dowjones.com
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