After recommending a separate takeover offer just last week, the board of gold and base metals explorer, Herald Resources (HER) officially jumped ship on Wednesday after announcing its unanimous support for a new offer (worth $504.8 million) from Indonesia's Antam group and Zhongjin of China.
Last week the board unanimously recommended the initial takeover offer made on 12 December, from Indonesian coal miner PT Bumi Resources, worth $455 million.
Antam and Zhonjgjin are offering $2.50 cash per share for the entire issued capital of Herald, compared to PT Bumi's offer of $2.25 per share.
In a joint release to the ASX, Antam, Zhongjin and Herald Resources said: "The board of Herald Resources withdraws their previous recommendation to accept the lower offer of $2.25 per share of Calipso Investment (a wholly owned vehicle of PT Bumi) and unanimously recommends that shareholders accept the Antam/Zhongjin offer in the absence of a superior proposal."
The Antam/Zhongjin offer is 25 cents per share higher than the Calipso offer of $2.25 per share and represents a premium of $0.236 over the volume weighted average of all Herald share traded since the announcement of the Calipso offer.
"We believe that the Antam / Zhongjin offer represents an excellent outcome for Herald's shareholders and we will be working with them to ensure that this offer is put to shareholders as expediently as possible," Chairman of Herald Resources Terrence Allen said.
Strengthening its position, Antam on Wednesday acquired a 10.7% relevant interest in HER shares.
The takeover offer from the Antam/Zhongjin is subject to Foreign Investment Review Board approval and minimum acceptance condition of 50.1%.
Antam is a state-controlled Indonesian mining group that already holds 20% interest in Herald Resource's 80%-owned Dairi zinc/lead project in Northern Sumatra Indonesia.
Zhongjin is a zinc/lead mining and smelting company based in the People's Republic of China and operates the low cost Fankou mine.
The primary and most attractive asset of Herald Resources is an 80% interest in the high-grade zinc/lead Dairi Project in Indonesia.
On 3 January, 2008 the company said it received positive metallurgical testing results from the project. The ore from Lae Jehe deposit at the Dairi project has a resource of 6.5 million tonnes at 11% zinc and 6% lead, the company said.
The bidding war has provided share price support in a volatile market . Trading around $1.83 before the bid from Calipso on December 11, HER has been trading at an average of $2.229 ever since.
Following the takeover announcements, shares in HER hit a 52-week high of $2.60 during intraday trading today.
This is more than 200% increase from its 1-year low of 99 cents back in April 2007.
Shares added 8 cents to $2.58.
