Asian group makes £99m takeover offer for Asia Resource Minerals

Asia Resource Minerals, the Indonesia-based coal group formerly known as Bumi and co-founded by Nat Rothschild, has received a £99m takeover offer from an Asian consortium including Indonesia's wealthy Widjaja family, which argues that the company needs a local owner.

The offer outlined on Thursday is funded by the Widjaja's Sinarmas conglomerate and also involves Hong Kong hedge fund Argyle Street Management, which is already a shareholder in the London-listed miner.

It competes with a $100m recapitalisation plan put forward by Mr Rothschild that could enable him to gain control of Asia Resource.

Mr Rothschild has also said that his NR Holdings vehicle and Russia's Suek coal group are considering a possible takeover of the company.

Thursday's offer is the latest twist in a long saga between the British financier and powerful families of a country that, while rich in economic potential and natural resources, can be extremely hostile to foreign business owners.

Mr Rothschild's push to gain control of Asia Resource comes after he unwound an alliance with Bumi's co-founding Bakrie family, an Indonesian political and business dynasty with whom he fell out acrimoniously.

The Asian consortium, using a bidding vehicle called Asia Coal Energy Ventures, said in a statement that Asia Resource - whose main asset is Indonesian coal company Berau Coal - was being run in a "suboptimal fashion" and needed an "established Indonesian partner".

Its offer includes an equity injection worth $150m, and a promise to reduce the company's debt. Net debt stood at $578m at December 31.

Asia Coal Energy said that the 41p per share offer, valuing Asia Resource's equity at £99m, represented a 173 per cent premium to its closing price on April 13, the day before the consortium's interest emerged.

Asia Resource's shares were up 3.4 per cent at 39.5p in early London trading on Thursday. They have risen from a low of 3.6p last December.

Kin Chan, a partner at Argyle Street, said that the offer "provides a full cash alternative at a significant and firm premium for all equity holders, with an intention to inject more equity finance and provide a genuine operational platform for the coal asset in Indonesia to seek to generate returns for all stakeholders".

He urged Asia Resource's shareholders, at a meeting on May 14, to reject Mr Rothschild's recapitalisation proposal. The plan was conceived as part of a refinancing of $450m of Berau bonds, which fall due for repayment in July,

Mr Chan described the possible offer from NR Holdings as "a last-minute reactive attempt to revive NR Holdings' opportunistic plan to take control" of Asia Resource through the recapitalisation.

He said that such an offer "would not address the key issue of local partnership which [Asia Coal Energy] considers to be essential to a successful outcome for all Asia Resource shareholders, including bondholders, employees and the wider local economy".

The Asian consortium said that it has struck a deal with Austria's Raiffeisen Bank to acquire $120m of loans. The bank controls the voting rights of almost 24 per cent of Asia Resource's shares after lending money to Samin Tan, a former chairman of the company.

The Widjaja family, known for its close links to the family of Indonesia's former autocratic president Suharto, founded Asia Pulp & Paper, which in 2001 famously defaulted on $14bn of bonds issued to foreign investors.

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