Finders Resources has urged its shareholders to reject a takeover bid from Indonesian group Eastern Field Developments after independent expert Deloitte valued the copper miner well above the 23 cents offer price, despite Finders’ share price continuing to hover near that mark.
As part of Finders’ response to the takeover offer, three of the company’s independent directors assessed the proposal with Salient Corporate as financial adviser, Ashurst as legal adviser, and Deloitte as independent expert.
The three independent directors were chairman Gary Comb, managing director Barry Cahill and non-executive director Gordon Galt.
Deloitte valued the company’s shares between 31 and 35 cents each, leading Mr Comb to say the offer of 23 cents was not fair.
“The independent directors consider that the offer price .. does not reflect the fair value of Finders shares,” Mr Comb said in a letter to shareholders.
“This view is supported by the conclusion of the independent expert in the independent expert's report.”
Mr Comb also said the offer was opportunistic.
“The offer is being made at an opportunistic point in time, prior to Finders shareholders being able to enjoy the returns from Finders' investment in the Wetar copper project,” he said.
Eastern director David Fowler said his company expected a bullish valuation from Finders' independent expert.
"Needless to say, we wholeheartedly disagree with Deloitte's valuation because, with all due respect to Deloitte, the valuation reflects a theoretical world of perfection,” he said
“And as Finders has demonstrated since Wetar produced its first copper cathode in 2014, and underlined with its three production downgrades in the past five weeks alone, the operating reality is far different to the value creation Finders once promised its shareholders.
"In fact, since Wetar's development, Finders shares have not come close to trading in the 31 to 35 cents fair value range suggested by the independent expert because investors simply do not believe Finders is worth that much.”
Finders shares finished the day up 2 per cent at 24 cents.
