The Rothschild family get-together at Hannukkah could be interesting this year, with Bumi appointing the Rothschild Group as its financial adviser while former Bumi director Nathaniel Rothschild is said to be forming a consortium to back him in a buy-out attempt.
Business is business, however, and the appointment of the Rothschild Group, a finance house with a history dating back to the early nineteenth century, comes as no surprise after Bumi called in the group to evaluate proposed transactions by major Bumi stakeholder, the Bakrie Group, that are intended to bring to an end board room strife at the Indonesian mining group.
On Thursday 11th October, shares in Bumi leapt after the Bakrie Group tabled an offer under which it would swap its stake in the group for a stake of equivalent value in Bumi Resources, a subsidiary of Bumi.
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It was hoped that the proposal could bring the curtain down on the fractious relations between the Bakries, one of Indonesia's wealthiest and most influential families, and another of the Bumi's original backers, financier Nat Rothschild. However, on Tuesday 16th Rothschild resigned from the board of Bumi, saying he had lost confidence in the management's ability to stand up for investors.
In addition, the Bakrie Group also made a conditional proposal on Thursday 11th to buy back the remaining 18.9% shareholding in Bumi Tbk for cash before Christmas 2012, and made a conditional proposal to make a cash offer within the next six months for the company's approximately 84.7% shareholding in PT Berau Coal Energy Tbk.
The independent non-executive directors of Bumi are relying on Rothschild Group's advice to determine whether the Bakries' proposals represent fair value to Bumi shareholders.
Nat Rothschild, who is related to Baron David de Rothschild, the Chairman of Rothschild Group, is putting together a consortium of backers to launch a counter-offer to the Bakrie family's proposal, news agency Reuters reports.
"Sources familiar with the matter said Rothschild - who set up Bumi with the Bakries two years ago - was in talks with various partners including former general and current presidential candidate, Prabowo Subianto, to thwart the Bakrie plan and take control of parts of the coal empire," Reuters reports.
Subianto is the former son-in-law of ex-Indonesian President Suharto.
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