Bidders for Asia Resource Minerals aim to submit a formal takeover offer this week, said the deal’s adviser founded by veteran commodities banker Ian Hannam.
Asia Coal Energy Ventures, or ACE, will make a 41 pence-a-share bid for ARMS, Neil Passmore, chief executive of Hannam & Partners, said in an interview.
The offer will be funded by the Sinarmas group, controlled by Indonesia’s Widjaja family, and the financing is in place, he said.
“We have been working with the Takeover Panel over the past week on how to proceed with the offer,” he said.
“The share price reaction to the offer shows a 65 percent probability of acceptance but it’s not a slam dunk deal, we have a lot of work to do to prepare the bid and convince the shareholders.”
ARMS jumped 80 percent to 27 pence by the close in London, valuing the company at 65 million pounds ($96 million).
The offer threatens a rescue plan by ARMS founder Nathaniel Rothschild and renews tensions with Hannam, who brokered the 2010 deal that first involved the banking heir in Indonesia’s coal industry.
Hannam proposed the $3 billion coal transaction with Indonesia’s powerful Bakrie family, leading to the creation of Bumi. In 2013, Bumi changed its name to ARMS after a $501 million deal to sever ties with the Bakries.
“Hannam is advising a BVI shell company with no assets and no cash,” Rothschild said. “Furthermore, there is currently no bid on the table.”
An ARMS executive contacted by Bloomberg declined to comment, referring to the company’s statement released Tuesday that said it hadn’t received direct communication from ACE.
The bidders have contacted shareholders including Austria’s Raiffeisen Bank International, which controls 23.8 percent of the voting rights, and former chairman Samin Tan, Passmore said.
“We have also talked to Samin Tan because he still has an influence over about 48 percent of the shares and he is positive about the offer,” he said. “But we are in no way acting jointly with him.”
The venture doesn’t have relations with the Bakries or former ARMS director Roslan Roeslani, Passmore said.
ARMS in December won an arbitration order against Roeslani over his failure to deliver $173 million of assets and cash. He had agreed in June 2013 to hand over the holdings after a review of the company’s Indonesian unit found $201 million of spending with “no clear business purpose.”
ACE hasn’t been able to discuss its offer with Rothschild, Passmore said.
“We haven’t been able to talk to Nat Rothschild about the offer,” he said. “He was the first person we rang and have made repeated attempts to contact him.”
In February, Rothschild agreed to underwrite $100 million of equity to help ARMS renegotiate $950 million of bonds and avoid default. Shareholders will vote on the plans April 22.
ACE, supported by Argyle Street Management, a 4.7 percent holder of ARMS, and Indonesia’s Sinarmas group, urged ARMS investors to reject Rothschild’s funding proposals.
Sinarmas is owned by the Widjaja family, which has interests from energy and infrastructure to banking.
Hannam & Partners was founded by the banker after he left JPMorgan Chase.
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