=DJ 2nd UPDATE: Herald Resources Calls For End To Bid Stalemate (Adds Herald and Antam comment) By Alex Wilson Of DOW JONES NEWSWIRES
MELBOURNE (Dow Jones)--The six month battle for control of Herald Resources Ltd. (HER.AU) reached a stalemate Wednesday, with both rival bidders now making unconditional offers of A$553.6 million and the board of the base metals developer calling for a decisive bid to end the standoff. Indonesia's PT Bumi Resources (BUMI.JK) announced it was waiving the 50.1% minimum acceptance condition on its A$2.80 cash per share offer, making its offer unconditional. Herald directors had recommended the rival bid of the Tango consortium, made up of Indonesia's Aneka Tambang (ANTM.JK), or Antam, and China's Shenzhen Zhongjin Lingnan Nonfemet Co. (000060.SZ), after it declared its offer unconditional last week. With both bidders now unconditional and offering A$2.80 a share, the board faces a tough decision on which to recommend, unless one of the bidders decides to break the stalemate. Herald Chairman Terry Allen said the company didn't know what either bidder would do now but called for an end to the takeover battle. "We believe it is in the best interests of Herald shareholders for an offer to emerge that provides a clear financial advantage and allows this protracted process to end," he said in a statement. "It would also allow Herald and its employees to get on with the job of progressing our world class zinc-lead project in Indonesia." Herald said it is assessing the latest Bumi announcement and will make a recommendation in due course. Antam Finance Director Kurniadi Atmosasmito told Dow Jones Newswires the company is considering its next move. "We will study the next step before we make a further step," he said. The prize for the bidders is Herald's Dairi project in Northern Sumatra which is forecast to produce 220,000 metric tons of zinc concentrate and 100,000 tons of lead concentrate a year when fully operational. But with lead and zinc prices falling sharply in recent months, some market watchers say the bidders may be becoming more cautious about the value of the project. The zinc price has fallen 34% to US$1,900 a ton from a March high of US$2,900 a ton, and the lead price has tumbled 46% to US$1,820 a ton from its March high of US$3,380. Another possible factor in the future of the takeover battle is a change of leadership at Antam, with long-standing Chief Executive Dedi Aditya Sumanagara ending his tenure Wednesday. Antam's shareholders will convene Thursday to name new directors as most of them, including Dedi, have been in the management team for 10 years, the maximum years allowed in listed companies in Indonesia. Despite the stalemate in the bidding war, investors continue to bet that a higher offer will emerge with Herald shares climbing 0.3% to A$2.95 in an Australian market that ended down 1.0%. Herald also said Wednesday it is continuing to assess its funding requirements and was likely to need to raise further equity capital in the September quarter.
