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.

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.

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.

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.

RD

Recommended

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
5 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

House prices could fall 30%. Should investors be worried about a repeat of 2008?
Investments

House prices could fall 30%. Should investors be worried about a repeat of 2008?

Some analysts are predicting that house prices could fall as much as 30%, which, when compared to the fact that prices have jumped 28% since April 201…
24 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
Council tax increases 2023 – how much more will you pay?
Tax

Council tax increases 2023 – how much more will you pay?

Your council tax bill will go up in April - we reveal the councils that have confirmed what this year’s increase will be.
23 Jan 2023