The independent directors of Finders Resources have questioned some of the claims and assumptions used by Indonesian group Eastern Field Developments, which has announced a takeover offer for the West Perth company.
The independent directors of Finders Resources have questioned some of the claims and assumptions used by Indonesian group Eastern Field Developments, which has announced a takeover offer for the West Perth company.
The independent directors have reiterated their advice that shareholders should take no action for now, but their preliminary view was critical of the bidder.
The three independent directors assessing the takeover proposal are Finders chairman Gary Comb, managing director Barry Cahill and non-executive director Gordon Galt.
They have appointed Salient Corporate as financial adviser, Ashurst as legal adviser, and Deloitte as independent expert.
A fourth director, Gavin Caudle, was not considered independent because he is a director and representative of Provident Minerals – one of three companies that owns Eastern Field Developments.
Eastern plans to offer 23 cents in cash for every Finders share it does not already own, valuing the target at $177 million.
This represents a premium to Finders’ long-term share price.
However, the independent directors said today it was in line with Finders’ closing price on October 5, the day before the takeover offer was announced.
They added the takeover offer was a discount to the trading price in the five days and 30 days prior to the announcement.
They also questioned some of the commentary surrounding copper recoveries from Finders main project, the Wetar copper operation in Indonesia.
Finally, the independent directors questioned the suggestion that divestment of Finders’ ownership of mining licences in the project may apply from the commencement of the demonstration plant in December 2008.
“This suggestion is entirely without merit,” they stated.
Eastern Field is made up of Indonesian companies Provident Minerals and Saratoga, which are also existing stakeholders in Finders with a combined 19.8 per cent stake, and copper-gold producer Merdeka.
Eastern Field director David Fowler has previously said that, if the offer was unsuccessful, Provident and Saratoga would review their interests in Finders and would consider divesting their shares and withdrawing interest in the business.
“Provident and Saratoga have determined their existing interest in Finders is too small in the context of their collective portfolios,” he said.
“This offer enables them to materially increase their shareholding in Finders.
Argonaut is acting as financial adviser to the consortium, while Iffla Wade is acting as legal adviser.
Shares in Finders were 1 cent higher at 24.0 cents today.
