Takeover Panel urged to intervene in Bumi conflict

British watchdog the Takeover Panel is being urged by investors to step in over the battle for control of troubled Indonesian coal miner Bumi plc.

It comes as Bumi plc shareholders prepare to meet Thursday to vote on co-founder Nathaniel Rothschild's proposal to replace 12 of the 14 directors on the board.

Bumi plc has advised shareholders against the vote, saying it goes against its plans to separate itself from the Bakrie Group and Bumi Resources.

The company was formed in 2010 by Rothschild and Indonesia's influential Bakrie family. They bundled together the coal assets of Bumi Resources and PT Berau Coal Energy. Through Rothchild's investment vehicle, Vallar, they renamed it Bumi plc.

However, company infighting and investigation into financial wrongdoing has seen Rothschild and the Bakries unwind their interests in the company.

Bakrie Group has put forth a deal to cancel its indirect 23.8% stake in exchange for Bumi plc's 10.3% holding in Asia's biggest thermal coal exporter PT Bumi Resources.

Bumi Plc would also sell the remaining 18.9% interest it holds in Bumi Resources to the Bakrie Group for $278m.

However, the Bakries warned they would withdraw the offer if shareholders vote for Rothschild's proposal to rid members of the board.

As members of management continue to butt heads, the Takeover Panel has been under pressure to intervene to ensure all shareholders are treated equally.

The debacle took another turn as it has emerged that Rosan Roeslani, a 13% shareholder, has found potential buyers for his stake.

Roeslani was told by the Panel in December that he was not allowed to vote his shares after being exposed as a member of a shareholder concert party with the Bakries, which limited their votes to 29.9%.

The panel ruled that the Bakrie Group and Roeslani's indirectly controlled Bukit Mutiara, which together control 50.3% of the voting rights in Bumi plc, was regarded as "acting in concert". They were told to reduce those rights to less than 30% by disposing of shares.

If the watchdog Panel cleared any buyers from belonging to a concert party, they would hold a key 13% interest.

The Panel would need to make its ruling by Tuesday 11am. However there may be an option to postpone the extraordinary general meeting.

Rothschild said the Panel has little time to challenge any ruling before the meeting.

"To do that in 48 hours would be extremely contentious and I think it's highly unlikely," he said.

Advisors of Bumi plc and the Bakries are now arguing over the number of shares Rothschild and his cousin, Tom Daniel, can purchase. They are also questioning whether Schroders, who backs Rothchild's proposal and holds a 4.2% stake, is part of a concert party with them.

Daniel's St James's Master Fund recently bought shares which is understood to have left him and Rothschild with 25.2% of the voting shares. The transaction is also enhanced by the voting restrictions on the Bakries.

The pair is permitted to take their economic stake up to 29.9%.

A separate inquiry by the Panel into whether the Bakries or Rothschild failed to disclose the Bakrie/Roeslani concert party is unlikely to conclude before the meeting.

RD