13/03/2018 - 11:23

Panel throws out Eastern application

13/03/2018 - 11:23

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The Takeovers Panel has dismissed an application from Indonesian group Eastern Field Developments regarding its takeover target Finders Resources, with the panel determining that appropriate action has been taken by the company in relation to its Wetar project.

Panel throws out Eastern application
Finders is a copper producer with interests in Indonesia.

The Takeovers Panel has dismissed an application from Indonesian group Eastern Field Developments regarding its takeover target Finders Resources, with the panel determining that appropriate action has been taken by the company in relation to its Wetar project.

Eastern Field, which has made a 23-cents-per-share offer for Finders, was seeking final orders that Finders provide corrective disclosure on production levels at the Wetar copper project in Indonesia, along with a revised independent expert’s report.

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

The Indonesian group has raised concerns with the project’s production levels and associated forecasting after output was 40 per cent below its 7,000-tonnes nameplate capacity in the December quarter.

However, the panel said the copper miner had provided updated operational and financial information and that Deloitte’s revised report was based on a more conservative recovery in production.

“Having regard to the updated information from Finders and advice from the technical specialist expert, the independent expert confirmed that each change in the key assumptions had an immaterial impact on its valuation analysis and that collectively the changes had a negligible impact on its valuation range and did not alter its opinion that Eastern Field's offer is neither fair nor reasonable,” the panel said

“In response to Eastern Field’s concerns in relation to working capital, Finders submitted that its independent directors maintain their view regarding Finders’ balance sheet position and that no new circumstances have arisen that require additional disclosure at this time.”

The panel concluded there were no reasonable grounds to make a declaration of unacceptable circumstances.

The sitting panel was made up of sitting president Karen Evans-Cullen, Stephanie Charles and Sharon Warburton.

In a statement to the ASX today, Finders said it welcomed the decisioned and remained of the view that shareholders should reject the takeover offer from Eastern Field.

Eastern Field said it remained committed to pursuing improved disclosure from Finders.

Eastern increased its stake to 34 per cent last week, up from about 26 per cent. 

Meanwhile, the Indonesian group announced today that its current offer was final.

“Now that the offer price of 23 cents is final, Finders shareholders should accept as soon as possible so that they can receive the consideration within one month of acceptance,” Eastern Field director David Fowler said

“Accepting shareholders will benefit from receiving a certain cash payment rather than remaining exposed to the significant operational and financial risks associated with being a shareholder in Finders.”

Shares in Finders were flat at 23 cents each at 2pm AEDT.

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