Rothschild's Bumi proposal rejected amid investigation

A proposal from Nathaniel Rothschild regarding the fate of Bumi Plc's coal assets has been rejected following insufficient backing from stakeholders.

A proposal from Nathaniel Rothschild regarding the fate of Bumi Plc's coal assets has been rejected following insufficient backing from stakeholders.

The founder of Bumi Plc recommended PT Borneo Lumbung and PT Bukit Mutiara sell their holdings in the London-listed group.

However PT Borneo Lumbung, owner of 23.8%, and PT Bukit Mutiara, 9.8%, turned down the offer on Wednesday.

Advertisement - Article continues below

The news comes amid an ongoing acrimonious dispute between Rothschild and Indonesia's Bakrie Group.

The two started Bumi together in 2010 in a $3bn deal that merged stakes in the Indonesian investor's coal companies into cash shell, Vallar.

The company infighting between Rothschild, who owns 12% of Bumi Plc voting stock, and Co-Chairman Indra Bakrie have led the two to resign from the board.

Now the UK Takeover Panel, which oversees mergers and acquisitions, has ruled the Bakrie Group and Bukit Mutiara should have been regarded as a "concert party" in the 2010 deal.

Advertisement - Article continues below

The corporate takeover regulator said it was investigating into why it was not made aware of their close relationship.

The UK's takeover code states investors owning 30% or more of a company must make an offer for the whole.

The Bakrie Group and Bukit Mutiara, a company associated with businessman Rosan Roeslani, together control 50.3% of the voting rights in Bumi Plc.

Advertisement - Article continues below

The regulator has ordered that the voting rights of the Bakries and Roeslani be reduced to 29.9% despite them owning considerably more of the shares than that.

The ruling has led to yet another head rolling as Roeslani announced his resignation from the board.

Following the resignations of Roeslani, Rothschild, Bakrie and former Chief Executive Ari Hudaya - who represented the founder shareholders in the company - the board of Bumi will be composed of a substantial majority of independent directors.

Nalin Rathod, a Bakrie Group nominee, has also informed the company that he will resign from the board as a non-executive director after the completion of the transaction to separate the company from Bumi Resources.

Nick von Schirnding, who is independent from all founder shareholders, becomes CEO in the New Year.

As the tit-for-tat continues, the Bakries said on Wednesday they had lodged a complaint with the panel regarding "the conduct of Rothschild during the original takeover".

The Bakrie family has proposed swapping their stake in Bumi for a stake of equivalent value in Bumi Resources, thus ending the relationship between Bumi and themselves.

The Bakrie Group has offered $1.2bn to acquire a 29% stake in PT Bumi Resources and an 85% interest in PT Berau Coal Energy.

The plan has only partial backing, according to Bumi Senior Independent Non-Executive Director Julian Horn-Smith.




Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular


The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020

This chart pattern could be extraordinarily bullish for gold

The mother of all patterns is developing in the gold charts, says Dominic Frisby. And if everything plays out well, gold could hit a price that invest…
1 Jul 2020