Herald Receives $455 Million Takeover Offer From Bumi

By Glenn Dyer | More Articles by Glenn Dyer

Shares in Herald Resources (HER) rose by more than 26% today after it announced that Indonesian coal miner PT Bumi Resources has launched a $455 million takeover offer.

Bumi has offered $2.25 for each share in the gold and base metals exploration company.

Chairman of Bumi, Ari Hudaya said he believed the all-cash offer would be very attractive to Herald shareholders as the offer values their shares at a substantial premium to historical trading levels, especially in the current environment of declining zinc and lead prices.

"The offer provides Herald shareholders with an opportunity to realise full value for their investment as cash while eliminating commodity price uncertainties and the risks of further delays, costs overruns and funding demands from the Dairi project," said Mr Hudaya.

Dairi is Herald's prize zinc-lead project in Sumatra, north Indonesia.

The company has completed feasibility studies on the $253 million project and has been waiting for environmental approvals to proceed to full development.

"Bumi's experience in the Indonesian mining sector and the requirements of the Indonesian regulatory process make it uniquely positioned to advance the Dairi zinc-lead development project in an efficient and timely way."

"Bumi recognises Dairi as a long-term strategic asset and is willing to invest the significant time and resources required for regulatory approval and mine development to unlock the full potential of the project."

The takeover offer from Bumi is subject to Foreign Investment Review Board approval and a minimum acceptance condition of 50.1%

Herald shares rose by 23.5% or 43 cents to close up at $2.26.

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About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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