Major Finders shareholder rejects Eastern Field takeover offer

Finders Resources, the target of a takeover bid from Indonesian consortium Eastern Field Developments, has received the support of a major shareholder, Taurus Funds Management.

Eastern Fields originally announced its acquisition plans in response to what it described as unsatisfactory performance at Finders’ flagship Wetar copper project in Indonesia.

Taurus, which owns over 87 million Finders shares, stated that it would not accept Eastern Field’s offer of $178 million (23 cents per share) to buy up all unowned Finders shares. Taurus’s 87 million shares represents a 11.31 per cent stake in Finders, making the company the second-largest investor in Finders Resources after the companies that make up Eastern Field (19.8 per cent).

Taurus has reflected Finders’ view that the offer from Eastern Fields is “opportunistic” and not reflective of fair value.

Eastern Field’s takeover bid does not seem to be proceeding entirely as planned, according to Finders. Eastern Field had not reported any changes in relevant interests by end of December 5, leading the company to assume that the consortium has so far received offers of less than one per cent of Finders shares.

Noted economists Deloitte released an independent report that suggested a fair price for Finders’ shares was closer to 31–35 cents per share.

Eastern Field development director David Fowler has since responded to Finders and by extension, Deloitte’s claims that the offer lacks value.

“Eastern Field, with our wealth of mining and Indonesia-specific operational experience, strongly believes 23 cents reflects the full value of Finders shares,” he said.

“We would be delighted to sell our 19.8 per cent shareholding for the prices mentioned in the Deloitte report, if someone wants to make us an offer.

“Unfortunately, no one was interested before the recent production issues at Wetar created serious uncertainty on future production expectations, so we would expect even less interest now.”

A representative of Finders Resources who contacted Australian Mining also noted that Finders’ share price had dropped to 23 cents (following a period of fluctuation) since Eastern Field announcement went public.