* Tan's Borneo to buy Bakries' 23.8 pct stake in Bumi Plc
* Depends on Bakries buying Bumi's stake in Bumi Resources
* Also requires waiver of a UK takeover rule
* Bumi Plc shareholder Rothschild critical of the deal
By Sarah Young, Saeed Azhar and Fathiya Dahrul
JAKARTA/LONDON, July 11 Indonesian coal tycoon
Samin Tan has agreed a $223 million deal to lift his stake in
Bumi Plc to over 47 percent, buying out the Bakrie family in the
first part of a deal aimed at ending the family's involvement in
the troubled London-listed coal miner.
Bumi Plc was co-founded by financier Nat
Rothschild and Indonesia's influential Bakrie family. But Bumi
Plc and the Bakries have been seeking to part ways after two
years of boardroom battles and a probe into financial
Tan, Bumi's outgoing chairman, is buying the Bakries' 23.8
percent stake through Indonesia's Borneo Lumbung Energy & Metal
Tbk in a deal which will take Borneo's stake in Bumi
to 47.6 percent, it said in a statement to the Indonesia Stock
Exchange on Thursday.
Bumi Plc, one of the world's largest thermal coal exporters,
had on Wednesday announced a new separation plan with the
Bakries which involved Tan buying the family's stake.
The second part of the latest plan involves the Bakrie
family buying Bumi Plc's stake in Jakarta-listed Bumi Resources
for over $500 million in cash, a deal which Bumi said
the two are discussing.
Tan's purchase of the stake is conditional upon the second
part of the deal taking place plus the approval of that deal by
Bumi's independent shareholders and a waiver of UK takeover
rules that require an investor to make an offer for all shares
in a company if its stake rises over 30 percent.
Borneo, which is struggling with its $1 billion of debt and
is seeking to reduce it having breached some loan agreements
that are now being renegotiated, said the deal would benefit its
finances by averaging down its acquisition cost of Bumi shares.
Tan's involvement in Bumi dates from 2011 when he pulled the
Bakries out of a debt crunch, investing part of a $1 billion
loan from Standard Chartered to buy a stake in Bumi, only to see
the investment plunge.
"(Borneo) hopes to see, and will endeavour to restore,
stability in Bumi Plc so as to allow its management to refocus
on activities that create value for all stakeholders," Borneo
Borneo booked a $550 million net loss for its 2012 financial
year, mainly due to lower commodity price and losses from its
investment in Bumi Plc, according to its financial statement
released on July 9.
Rothschild, who owns a 14.8 percent stake in Bumi Plc, has
criticised the latest separation plan.
The new deal differs from one originally proposed last year.
In that scenario, the Bakries had agreed to exchange $278
million of cash and their shares in London-listed Bumi for the
group's minority holding in Bumi Resources.
Rothschild argues the new plan enables Tan to control a
company without making a takeover offer to minority shareholders
and that minority shareholders should also be given the option
of purchasing the Bakrie family's interest in Bumi Plc.
The Bakries said the original deal was no longer an option.
"The PT Borneo Lumbung Energi & Metal Tbk transaction
announced today is the only way we intend to proceed, previous
options are off the table," Bakrie Group senior vice president
Chris Fong told Reuters by email.
Bumi Plc's split from the Bakries will allow it to press
ahead with a revival focused on its other subsidiary, Berau.
Bumi Plc, whose shares remain suspended after it delayed its
results having found financial irregularities in a subsidiary,
has become emblematic of institutional investors' worries about
governance of foreign resources firms listed in London.
Rothschild, whose relationship with Bumi Plc's board and the
Bakries has soured, has asked Britain's financial market
watchdog to look into whether Bumi Plc has made misleading
statements to the market.
British lawmakers earlier in July launched an inquiry into
resources companies to examine corporate governance issues at
miners, partly prompted by corruption probes at companies like
On Thursday an influential umbrella group of British
investors, the Association of British Insurers, called for a
rule change to protect minority shareholders.