ARMS Jumps as Potential Offer Pits Hannam Against RothschildFirat Kayakiran
Asia Resource Minerals Plc almost doubled in value after a venture advised by veteran commodities banker Ian Hannam said it’s considering making a takeover offer.
ARMS shares rose as much as 93 percent, the biggest gain since Dec. 31, and were trading 80 percent higher at 27 pence at 11:01 a.m. in London.
Asia Coal Energy Ventures, funded by Indonesia’s Widjaja family, said on Tuesday it’s weighing a 41 pence-a-share bid for ARMS, almost triple the company’s 15 pence closing price. An offer would threaten a rescue package proposed by ARMS founder Nathaniel Rothschild and renews tensions with Hannam, who brokered the original 2010 transaction that first involved the banking heir in Indonesia’s coal industry. Some shareholders expressed concerns over whether a bid would be made.
“Until there’s a more credible or clear or detailed plan then there’s nothing for us to take a view on,” Cato Stonex, holder of 1.04 percent of ARMS, said by phone. “This intervention may have been carefully timed to muddy the water. It doesn’t sound very serious.”
In February, Rothschild agreed to underwrite $100 million of equity to help ARMS renegotiate $950 million of bonds and avoid default after he won a shareholder vote against former Chairman Samin Tan, who tried to gain control of the company’s board.
ARMS shareholders will vote on the funding proposals by Rothschild’s NR Holdings on April 22. ARMS said on Tuesday that it has had no direct communication from ACE.
ACE, supported by Argyle Street Management Ltd., a 4.7 percent holder of ARMS, and Indonesia’s Sinarmas group, urged ARMS investors to reject Rothschild’s funding proposals and asked the company’s board to enter into discussions for its offer.
ACE may proceed with an offer even if the board refuses to negotiate, it said. It also promised to inject $150 million into the business.
Sinarmas is owned by the Widjaja family, which has interests from energy and infrastructure to banking. ACE is advised by Hannam & Partners, an investment firm founded by Hannam after he left JPMorgan Chase & Co.
In 2010, Hannam proposed the $3 billion coal deal with Indonesia’s powerful Bakrie family that led to the creation of Bumi Plc. In 2013, Bumi changed its name to ARMS after a $501 million deal to sever ties with the Bakries.
Tan and Austria’s Raiffeisen Bank International AG both hold 23.8 percent of ARMS voting rights. Rothschild has 17.5 percent.