Nat Rothschild Quits Bumi

on Oct 16, 2012

London financier Nat Rothschild resigned on Monday as a non-executive director of Bumi (LON:BUMI), the company he himself floated on the London Stock Exchange.

**Rothschild Resignation Letter**
Nat Rothschild sent a letter to Bumi’s chairman Samin Tan in which he explained the reasoning behind his resignation and also accused both the Indonesian Bakrie family and Mr Tan of “abusing” and “oppressing” minority shareholders.
What prompted the letter was the recent proposal of the Bakrie family to split from Bumi and completely buy back Bumi Resources and PT Berau Coal Energy, turning the London-listed conglomerate back into a cash shell company. Under this agreement, Samir Tan would have been reimbursed at a price of £10.91 a share, while other minority investors would receive a return of £4.30 a share.

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“This is a clear breach of the spirit and, I believe, the letter of the takeover code.” wrote Mr Rothschild in his letter. “…this proposal is so obviously not in the interests of minority shareholders that I find it impossible to stay on as a Director.”
!m[The London Financier Strictly Against the Bakries Separation Proposal amidst a Pending Probe](/uploads/story/586/thumbs/pic1_inline.png)The London financier also expressed regret about bringing the Bakrie’s business to London and giving them the City’s stamp of approval. According to him Indonesia’s international reputation has been largely damaged and the Bumi PLC story will linger as a “small but high-profile” impediment to ensuring the country’s growth. Mr Rothschild finished the letter by saying he is going to continue fighting “from outside the tent” against the offer of the Indonesian family.

**Bakrie Family Response**
Chris Fong, Bakrie’s spokesman, described Mr Rothschild resignation letter as “unfair, unreasonable and ridiculous” and the financier himself as a “disappointment” to the family and Bumi’s shareholders.
“Now he has the audacity to say we have disgraced Indonesia,” Mr Fong said as reported by The Telegraph “We hope that he returns all the shares and other benefits that have been awarded to him from this deal so that all shareholders will maximize the return on top of what the Bakrie family has offered.”

The Bakries previously proposed up to £40 million of “bonus” shares to Nat Rothschild should they succeed to buy back Bumi’s assets.
The head of corporate affairs at Bumi Nick von Schirnding commented regarding the letter that these are the personal views of Mr Rothschild. According to von Schirnding the independent directors are unanimous the proposal of the Bakries should be carefully examined. The company has appointed Rothschild bank to assess the value of the offer before the directors can make a recommendation to shareholders.

According to Simon Tan who took over as Bumi’s chairman in March, the proposed deal will leave investors with losses on their investments but these losses will be much smaller than what they are shouldering today given the share price of the London-listed conglomerate.
Last year Mr Tan’s company Borneo bailed out the Indonesian family when it was close to defaulting on a debt that had become due – in October 2011 Borneo agreed to buy half of the Bakrie share in Bumi for about $1 billion (£620 million).
Bumi shares, which have lost 90 percent since their peak value of £14, fell an additional 12.4 percent on Monday to £2.453 a share.


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