Alex Wilson, Dow Jones Newswires | January 18, 2008
HERALD Resources yesterday revealed it had this week briefed interested parties, raising the prospect a rival bidder could emerge to challenge a $445 million bid by Indonesia's PT Bumi Resources.
The base metals developer told the Australian exchange it had briefed management of the various bidders, some of which would visit its Dairi zinc and lead project in northern Sumatra next week.
A person familiar with the situation said the interested parties, from Indonesia, Australia and elsewhere, had signed confidentiality agreements.
Herald has until Wednesday to issue its recommendation on the Bumi offer, which closes on February 15 unless extended.
The takeover target has reiterated its advice that shareholders take no action in the interim. The Perth company yesterday also released the results of a feasibility study of the Dairi project, which it said would deliver post-production cashflow of $US1.1 billion ($1.24billion) after tax, with a 48 per cent internal rate of return.
Herald said the capital cost of the development was $US227 million, up from the previous estimate of $US221 million, and $US50 million of that had already been spent.
Chairman Terry Allen said the study indicated a mine life of seven years but Herald was hopeful it could extend that substantially with resources from nearby deposits.
Meanwhile, Bumi said it had received approval from Australia's Foreign Investment Review Board for its bid and that its offer was now unconditional.
Herald closed up 0.5 per cent at $2.21, below the Bumi offer of $2.25 a share, in an Australian market that was down 0.2 per cent.
HER Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
