15/02/2018 - 15:22

Finders takeover offer unconditional

15/02/2018 - 15:22

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Finders Resources’ major shareholder, Eastern Field Developments, has changed its hostile takeover bid for the copper miner to 'unconditional' status, with the Indonesian consortium continuing to raise concerns about the company’s Wetar project.

Finders takeover offer unconditional
Finders is a copper miner with interests in Indonesia.

Finders Resources’ major shareholder, Eastern Field Developments, has changed its hostile takeover bid for the copper miner to 'unconditional' status, with the Indonesian consortium continuing to raise concerns about the company’s Wetar project.

In a statement to the ASX, Eastern said the 23 cents per share offer, valuing Finders at around $177 million, was now unconditional.

“The time has come to draw a line in the sand,” Eastern director David Fowler said.

“We announced our intention to take over Finders resources five months ago.

“Finders has had ample time to secure a white knight, but the reality is that no alternate bidders have emerged.”

The Australian reported last week that Chinese conglomerate Fosun International had considered a rival bid, but walked away at the last minute.

Finders has rejected Eastern’s offer, with a report by independent expert Deloitte valuing the company’s shares between 31 and 35 cents.

But Eastern, which holds a 24.9 per cent stake in the company, has questioned the valuation.

“The Finders management team may have been able to identify a theoretical valuation of 31 cents per share,” Mr Fowler said.

“However, real potential bidders have seen that valuation for what it is - highly theoretical and unrealistic.

“Now that our offer is unconditional and we are Finders’ largest shareholder … we urge Finders’ other shareholders to make the most of the certainty of our 23 cents per share cash offer, accept as soon as possible and receive cash within one month of their acceptances.”

The major shareholder also raised concerns with Finders copper project in Indonesia, with production 41 per cent below its 7,000-tonne nameplate capacity.

“In our opinion, Finders’ explanation for the shortfall fails to explain the size of the shortfall and Eastern Field is concerned that recoveries, in accordance with the feasibility study leach curve, are not being achieved,” the consortium said.

Eastern is also concerned about production estimates used by Deloitte in its valuation.

“We wonder where the Deloitte estimates of production for quarter one in 2018 have come from given that Finders now claims not to have provided any guidance on quarter one production, despite the independent technical expert BDA stating that its anlysis is based on information from management,” Mr Fowler said.

Finders said in a statement that it recommended shareholders reject the offer from Eastern by taking no action.

Shares in Finders finished up 6.5 per cent at 24 cents each.

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