The Indonesian-backed predator stalking Finders Resources will argue its $175 million bid for the copper miner offers a healthy premium and provides certainty, but the target’s closing share price on Friday suggests investors are betting on a sweetened or rival offer.
Eastern Field Developments, which launched a 23¢-a-share, off-market takeover bid for Finders this month, is expected to release its bidder’s statement this morning.
It is likely to argue the miner has underperformed by missing production targets at its Wetar mine in Indonesia, that it has failed to add ore reserves in six years and that the mine’s life is overstated.
It is understood EFD will contend that its 19.8 per cent holding in Finders is supporting the company’s share price and that it would likely fall significantly if it sold out, which it has threatened to do should its bid be unsuccessful.
EFD, a special purpose vehicle set up to effect the takeover, is jointly owned by Indonesia’s Procap Partners (Provident), Saratoga Investama Sedaya and Merdeka Copper Gold.
Provident invited its two partners to join a bid for Finders after failing to find a buyer for its stake in the company.
Its takeover is an attempt to end what it considers a stalemate around its Finders investment.
Other significant shareholders, Resource Capital Funds (9.5 per cent) and Acorn Capital (8.3 per cent) sold their shareholdings in Finders this year for 22.8¢ and 17.7¢ respectively.
Finders shares closed at 24.5¢ on Friday but it has traded as high as 27¢ since the EFD bid was announced.
FND Price at posting:
24.5¢ Sentiment: Buy Disclosure: Held
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