Bumi ups Herald offer, breaks stalemate

PT Bumi Resources Tbk has increased its takeover offer for Herald Resources by 5 cents, putting an end to the stalemate with rival bidder Antam-Zhongjin as the latter demands a break fee of $5 million.

Meanwhile, Bumi is now offering $2.85 cash per Herald share, valuing the bid at $563.45 million. It has also extended its unconditional offer to to July 18.

A spokesperson for Herald said the company has just received notification of Bumi's revised offer and that the directors will issue a formal response shortly.

"Obviously a higher offer is very good news for Herald shareholders," the spokesperson said.

The increased offer follows a demand by Antam today that Herald pay a break free of $5 million within 10 days after Herald recommended a competing proposal.

Under an agreement between both companies dating back to earlier this year, Antam said Herald had agreed to pay a compensating amount under certain circumstances including the recommendation by Herald of a competing proposal.

"These circumstances have occurred and Zhongjin and Antam today requested payment of $5m within 10 business days. This is Wednesday, 16 July 2008," Antam-Zhongjin said.

Last week, Herald recommended both takeover offers by Antam and PT Bumi Resources Tbk. Both bidders at the time were offering $2.80 cash for each Herald share.

However Antam said that in the event that it successfully acquired an interest in Herald of 50.1 per cent, it will refund the $5 million.

Both suitors are seeking to gain control of Herald's key asset, the $US220 million ($A$233.92 million) Dairi zinc-lead project in north Sumatra, which is 20 per cent held by Antam-Zhongjin. Herald is awaiting forestry approvals for the project.

Bumi currently has a 19.88 per cent stake in Herald while Antam has a 19.29 interest.