ASX-listed copper producer Finders Resources Ltd. has been handed an unsolicited takeover offer by an Indonesian consortium that values the company at much the same as its current market capitalization of about A$175.0 million.
Investment firm Procap Partners Ltd., part of the Provident Group, has joined forces with another Indonesian investment firm, PT Saratoga Investama Sedaya Tbk, and Indonesia-listed miner PT Merdeka Copper Gold Tbk to table a 23-cent-per-share cash offer.
Procap has been a Finders shareholder since 2012 and has assisted the company in the past to gain regulatory approvals in Indonesia. Procap also brought PT Saratoga in as a shareholder in 2013.
"Provident and Saratoga have determined their existing interest in Finders is too small in the context of their collective portfolios," David Fowler, director of bidding vehicle Eastern Field Developments Ltd., said Oct. 6.
"This offer enables them to materially increase their shareholding in Finders."
The consortium members and Eastern Field currently have a relevant interest of about 19.8% in Finders.
Prior to the announcement, Finders' share price was trading at about 23 cents, and following the news was up 2.17% at 23.5 cents.
Eastern Field said its offer is "significantly above" the three-month volume weighted average price of about 21 cents and the 12-cent price of Finders' last equity raising in November 2016.
"The offer also provides Finders shareholders with the opportunity to lock in certain all-cash value while removing the Indonesian operational and regulatory risks associated with Finders' Wetar project," Fowler noted.
September and October production from the project has been disrupted due to a contaminated processing circuit, and Finders expects to produce about 500 tonnes less copper cathode than in the June quarter.
Finders said it will consider the offer, which is subject to several conditions, and has advised shareholders not to take any action in the meantime.
Fowler said that if the consortium is unsuccessful in its takeover bid, Procap and PT Saratoga will review their shareholding and may off-load their entire stake in Finders.