PT Bumi Resources rose the most in more than nine years in Jakarta trading on optimism next week’s shareholder meeting of Bumi Plc, its largest shareholder, will resolve an ownership dispute.
Bumi Resources surged 26 percent to 910 rupiah at the 4 p.m. local-time close, the biggest increase since Dec. 11, 2003. Bumi Plc fell 3.1 percent to 431 pence as of 9:27 a.m. in London, after a 10 percent gain yesterday.
Shareholders of Bumi Plc, the London-traded Indonesian coal venture at the center of a battle for control between co-founders Nathaniel Rothschild and the Bakrie Group, will vote Feb. 21 at an extraordinary general meeting on a proposal to replace the current board including its chairman and chief executive officer.
“The market is expecting the outcome of the EGM in London to be a positive one and would allow the separation of Bumi Resources from Bumi Plc,” Wilianto Ie, head of research at PT Nomura Indonesia, said by phone.
Bumi Plc was created in 2010 by Rothschild and the Bakries when they bundled the assets of two coal companies -- a 29 percent stake in Bumi Resources and an 85 percent stake in PT Berau Coal Energy -- in a $3 billion deal. A boardroom feud and financial probes in the U.K. and Indonesia have since prompted the Bakries and Rothschild to seek to end their collaboration.
The Bakries propose exchanging their 23.8 percent stake in Bumi Plc for 10.3 percent of Bumi Resources owned by the London-listed venture. That plan also calls for Bumi Plc to sell to the Bakrie Group the remaining 18.9 percent of its Bumi Resources stake for $278 million in cash.
Rothschild called the Feb. 21 vote to try and replace 12 of the 14 directors of Bumi Plc, while also pursuing a separation from the Bakries.
The stock price gain today was probably driven more by shareholder “sentiment” than fundamental reasons, Dileep Srivastava, a director at Bumi Resources, said by telephone. The company’s coal production is headed for a good start this year with output on track to achieve a 10 percent, he said.