Indo Mines has urged shareholders to take no action on a $4.6 million takeover offer from its largest investor.
Leading Indonesian investor Rajawalia Group — which holds a 57.12 per cent stake in Indo Mines through its associates — is offering 2c per share for the 230.7 million Indo Mines shares it doesn’t own.
The offer price represents an 11 per cent premium to Indo Mines (ASX:IDO) last traded price of 1.8c prior to a trading halt on October 30.
Rajawali told investors the all-cash takeover allowed shareholders to realise certain and immediate value for their shares.
The predator also said it was a rare opportunity and potential liquidity event for shareholders who wish to exit their investment.
“This offer is the only offer currently available to IDO shareholders, and given the relevant interests of Rajawali and its associates in IDO, there are limited prospects of any competing proposal emerging and trading may be even less liquid following the offer, if the bidder increases its shareholding in IDO through the offer,” Rajawali said.
In its response, Indo Mines said the offer was not yet open for acceptances and urged shareholders not to take any action at this time.
Indo Mines has formed a sub-committee including non-executive chairman Peter Chambers and non-executive director Darryl Harris to review the offer and bidder’s statement once it’s received.
The company is also seeking to appoint an independent expert to assess the offer.
As at end of September quarter, Rajawali had provided US$1.9 million in loans to Indo Mines.
The company is progressing talks with a potential strategic partner to get a trail smelter facility off the ground at its Kulon Progo iron sand project in Indonesia.
Indo Mines was last trading unchanged at 1.8c after suspension was lifted.