By Michael Flaherty
HONG KONG, Nov 4 (Reuters) - U.S. hedge fund Farallon Capital and an Indonesian coal company are in talks to join private equity firm Northstar Pacific in its deal to buy a stake in the country's largest coal company, Bumi Resources , for $1.3 billion, according to sources familiar with the matter.
Farallon and Indonesian coal company PT Tambang Batubara Bukit Asam Tbk would help Northstar put up the cash needed to buy the stake from entities controlled by Indonesia's powerful Bakrie family, which has a $1.1 billion loan due in April.
UBS is advising Northstar, sources say. The sources did not want to be named because the deal is still being negotiated. Indonesia-based Northstar is run by former Goldman Sachs banker Patrick Walujo and has a joint venture with U.S. private equity firm TPG Capital LP.
Farallon and Tambang Batubara have not yet formally signed on as consortium members, while other firms and companies are considering a role in the consortium, sources said.
Indonesian investment bank PT Renaissance Capital may consider either joining the consortium or launching a rival offer, according to sources.
Northstar has signed a conditional agreement with Bumi Resources, allowing the firm and its partners to do due diligence over the next month, sources said. As in any offer under consideration, a rival group could trump Northstar's bid.
Fears about a possible Bakrie default on the loan prompted Indonesian authorities to suspend trading in the shares of six Bakrie companies in early October, weighing down the broader market and contributing to its closure for three days.
Farallon, Tambang Batubara, Northstar and Renaissance could not immediately be reached for comment.
PT Bakrie & Brothers Tbk, the holding company controlled by the Bakries, said last month it hoped to raise $1.2 billion by selling off stakes in its broad range of assets, including a stake in Bumi Resources.
Reuters reported on Oct. 17 that Northstar and Farallon were among the firms pursuing the Bumi Resources stake.
The holding company said on Saturday it agreed to sell a 35 percent stake to Northstar, declining to say whether Northstar was the sole buyer, or leading a consortium of other firms.
Credit Suisse, which is advising the Bakrie group on the sale, declined to comment.
Northstar, and any rival group should they emerge, will have to come up with a lot of cash to pay for the stake because banks are unlikely to provide big loans.
That is where Northstar's link to TPG helps because the U.S. firm has one of the largest buyout funds in the world. Yet the TPG link could also hurt too, as the Bakrie family and regulators are widely seen as wanting to keep shares of the highly profitable coal company in local hands.
Still, TPG and Farallon may not be local, but the firms have funds allowing them to spend hundreds of millions of dollars. Farallon has made several investments in Indonesia.
Aburizal Bakrie is Indonesia's chief social welfare minister and an important figure in the Golkar Party, which is a key part of President Susilo Bambang Yudhoyono's coalition. Indonesia's Globe magazine ranked Aburizal Bakrie as the country's richest man, with a $9.2 billion fortune. Bumi shares have tumbled 75 percent this year and are currently suspended. Its market capitalisation is $4.3 billion.
(Additional reporting by Saeed Azhar and Harry Suhartono; Editing by Andre Grenon)
((852 9864 8714; michael.flaherty@reuters.com)) Keywords: BUMIRESOURCES/
(Adds San Miguel also plans bid for Bumi)
By Rosemarie Francisco and Michael Flaherty
MANILA/HONG KONG, Nov 4 (Reuters) - The Philippines' San Miguel Corp said on Tuesday it would bid for 35 percent of Indonesia's largest coal miner, Bumi Resources , rivalling an offer led by private equity firm Northstar Pacific.
Asked if San Miguel was making a bid for Bumi, San Miguel President Ramon Ang told Reuters in a mobile phone text message: 'Yes. Northstar's offer is non-binding and non-exclusive.'
He gave no other details of the bid or whether San Miguel, Southeast Asia's largest food and beverage firm which is moving away from its core business into energy and mining, would seek partners.
Earlier, two separate investment banking sources said U.S. hedge fund Farallon Capital and Indonesian coal company PT Tambang Batubara Bukit Asam Tbk were in talks to join Northstar, which has offered $1.3 billion for the just over one third of Bumi held by entities controlled by Indonesia's powerful Bakrie family.
The sources said Indonesian investment bank PT Renaissance Capital might also consider bidding, either as part of the Northstar consortium or separately.
Bukit Asam said on Sunday it was part of the Northstar consortium, but did not give details. Farallon and Bukit Asam would help Northstar raise the cash needed to buy the stake from the Bakries, who have a $1.1 billion loan that falls due in April.
UBS is advising Northstar while Goldman Sachs is advising San Miguel, the sources said.
Indonesia-based Northstar is run by former Goldman Sachs banker Patrick Walujo and has a joint venture with U.S. private equity firm TPG Capital LP.
Northstar has signed a conditional agreement with Bumi Resources, allowing the firm and its partners to examing the company's accounts over the next month, the sources said.
Fears about a possible Bakrie default on the loan prompted Indonesian authorities to suspend trading in the shares of six Bakrie companies in early October, weighing down the broader market and contributing to its closure for three days.
Farallon, Northstar, and Renaissance could not be reached for comment.
PT Bakrie & Brothers Tbk, the holding company controlled by the Bakries, said last month it hoped to raise $1.2 billion by selling off stakes in its broad range of assets, including Bumi.
Reuters reported on Oct. 17 that Northstar and Farallon were among the firms pursuing the Bumi Resources stake.
The holding company said on Saturday it agreed to sell a 35 percent stake to Northstar, declining to say whether Northstar was the sole buyer, or leading a consortium .
Credit Suisse, which is advising the Bakrie group, declined to comment.
Northstar, and any rival group should it emerge, will have to come up with a lot of cash to pay for the stake because banks are unlikely to provide big loans in the current economic climate..
It was not immediately clear if San Miguel had the funds it would need.
The company is cash rich, but last week it signed a deal to buy 27 percent of the country's largest power distributor Manila Electric Co in a cash deal worth 30 billion pesos ($612 million), with payments spread out over three years.
The deal was San Miguel's first major acquisition in more than a year after it announced the move to invest in heavy industry such as power, mining, utilities and infrastructure. That decision was criticised by some analysts who said the company did not have the expertise in those sectors.
San Miguel has also said it wants to buy into oil refiner Petron Corp and is in talks with its majority owner, Ashmore Group.
Northstar's link to TPG should help its bid because the U.S. firm has one of the largest buyout funds in the world.
The Bakrie family are widely seen as wanting to keep shares of the highly profitable coal company in local hands.
TPG and Farallon may not be local, but the firms have the flexibility to spend hundreds of millions of dollars, and Farallon has made several investments in Indonesia.
Aburizal Bakrie is Indonesia's chief social welfare minister and an important figure in the Golkar Party, which is a key part of President Susilo Bambang Yudhoyono's coalition. Indonesia's Globe magazine ranked Bakrie as the country's richest man, with a $9.2 billion fortune.
Bumi shares have tumbled 75 percent this year and are currently suspended. Its market capitalisation is $4.3 billion.
(Additional reporting by Saeed Azhar and Harry Suhartono; Editing by John Stonestreet) Keywords: BUMIRESOURCES (852 9864 8714; michael.flaherty@reuters.com) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
HONG KONG, Nov 4 (Reuters) - U.S. hedge fund Farallon Capital and an Indonesian coal company are in talks to join private equity firm Northstar Pacific in its deal to buy a stake in the country's largest coal company, Bumi Resources , for $1.3 billion, according to sources familiar with the matter.
Farallon and Indonesian coal company PT Tambang Batubara Bukit Asam Tbk would help Northstar put up the cash needed to buy the stake from entities controlled by Indonesia's powerful Bakrie family, which has a $1.1 billion loan due in April.
UBS is advising Northstar, sources say. The sources did not want to be named because the deal is still being negotiated. Indonesia-based Northstar is run by former Goldman Sachs banker Patrick Walujo and has a joint venture with U.S. private equity firm TPG Capital LP.
Farallon and Tambang Batubara have not yet formally signed on as consortium members, while other firms and companies are considering a role in the consortium, sources said.
Indonesian investment bank PT Renaissance Capital may consider either joining the consortium or launching a rival offer, according to sources.
Northstar has signed a conditional agreement with Bumi Resources, allowing the firm and its partners to do due diligence over the next month, sources said. As in any offer under consideration, a rival group could trump Northstar's bid.
Fears about a possible Bakrie default on the loan prompted Indonesian authorities to suspend trading in the shares of six Bakrie companies in early October, weighing down the broader market and contributing to its closure for three days.
Farallon, Tambang Batubara, Northstar and Renaissance could not immediately be reached for comment.
PT Bakrie & Brothers Tbk, the holding company controlled by the Bakries, said last month it hoped to raise $1.2 billion by selling off stakes in its broad range of assets, including a stake in Bumi Resources.
Reuters reported on Oct. 17 that Northstar and Farallon were among the firms pursuing the Bumi Resources stake.
The holding company said on Saturday it agreed to sell a 35 percent stake to Northstar, declining to say whether Northstar was the sole buyer, or leading a consortium of other firms.
Credit Suisse, which is advising the Bakrie group on the sale, declined to comment.
Northstar, and any rival group should they emerge, will have to come up with a lot of cash to pay for the stake because banks are unlikely to provide big loans.
That is where Northstar's link to TPG helps because the U.S. firm has one of the largest buyout funds in the world. Yet the TPG link could also hurt too, as the Bakrie family and regulators are widely seen as wanting to keep shares of the highly profitable coal company in local hands.
Still, TPG and Farallon may not be local, but the firms have funds allowing them to spend hundreds of millions of dollars. Farallon has made several investments in Indonesia.
Aburizal Bakrie is Indonesia's chief social welfare minister and an important figure in the Golkar Party, which is a key part of President Susilo Bambang Yudhoyono's coalition. Indonesia's Globe magazine ranked Aburizal Bakrie as the country's richest man, with a $9.2 billion fortune. Bumi shares have tumbled 75 percent this year and are currently suspended. Its market capitalisation is $4.3 billion.
(Additional reporting by Saeed Azhar and Harry Suhartono; Editing by Andre Grenon)
((852 9864 8714; michael.flaherty@reuters.com)) Keywords: BUMIRESOURCES/
(Adds San Miguel also plans bid for Bumi)
By Rosemarie Francisco and Michael Flaherty
MANILA/HONG KONG, Nov 4 (Reuters) - The Philippines' San Miguel Corp said on Tuesday it would bid for 35 percent of Indonesia's largest coal miner, Bumi Resources , rivalling an offer led by private equity firm Northstar Pacific.
Asked if San Miguel was making a bid for Bumi, San Miguel President Ramon Ang told Reuters in a mobile phone text message: 'Yes. Northstar's offer is non-binding and non-exclusive.'
He gave no other details of the bid or whether San Miguel, Southeast Asia's largest food and beverage firm which is moving away from its core business into energy and mining, would seek partners.
Earlier, two separate investment banking sources said U.S. hedge fund Farallon Capital and Indonesian coal company PT Tambang Batubara Bukit Asam Tbk were in talks to join Northstar, which has offered $1.3 billion for the just over one third of Bumi held by entities controlled by Indonesia's powerful Bakrie family.
The sources said Indonesian investment bank PT Renaissance Capital might also consider bidding, either as part of the Northstar consortium or separately.
Bukit Asam said on Sunday it was part of the Northstar consortium, but did not give details. Farallon and Bukit Asam would help Northstar raise the cash needed to buy the stake from the Bakries, who have a $1.1 billion loan that falls due in April.
UBS is advising Northstar while Goldman Sachs is advising San Miguel, the sources said.
Indonesia-based Northstar is run by former Goldman Sachs banker Patrick Walujo and has a joint venture with U.S. private equity firm TPG Capital LP.
Northstar has signed a conditional agreement with Bumi Resources, allowing the firm and its partners to examing the company's accounts over the next month, the sources said.
Fears about a possible Bakrie default on the loan prompted Indonesian authorities to suspend trading in the shares of six Bakrie companies in early October, weighing down the broader market and contributing to its closure for three days.
Farallon, Northstar, and Renaissance could not be reached for comment.
PT Bakrie & Brothers Tbk, the holding company controlled by the Bakries, said last month it hoped to raise $1.2 billion by selling off stakes in its broad range of assets, including Bumi.
Reuters reported on Oct. 17 that Northstar and Farallon were among the firms pursuing the Bumi Resources stake.
The holding company said on Saturday it agreed to sell a 35 percent stake to Northstar, declining to say whether Northstar was the sole buyer, or leading a consortium .
Credit Suisse, which is advising the Bakrie group, declined to comment.
Northstar, and any rival group should it emerge, will have to come up with a lot of cash to pay for the stake because banks are unlikely to provide big loans in the current economic climate..
It was not immediately clear if San Miguel had the funds it would need.
The company is cash rich, but last week it signed a deal to buy 27 percent of the country's largest power distributor Manila Electric Co in a cash deal worth 30 billion pesos ($612 million), with payments spread out over three years.
The deal was San Miguel's first major acquisition in more than a year after it announced the move to invest in heavy industry such as power, mining, utilities and infrastructure. That decision was criticised by some analysts who said the company did not have the expertise in those sectors.
San Miguel has also said it wants to buy into oil refiner Petron Corp and is in talks with its majority owner, Ashmore Group.
Northstar's link to TPG should help its bid because the U.S. firm has one of the largest buyout funds in the world.
The Bakrie family are widely seen as wanting to keep shares of the highly profitable coal company in local hands.
TPG and Farallon may not be local, but the firms have the flexibility to spend hundreds of millions of dollars, and Farallon has made several investments in Indonesia.
Aburizal Bakrie is Indonesia's chief social welfare minister and an important figure in the Golkar Party, which is a key part of President Susilo Bambang Yudhoyono's coalition. Indonesia's Globe magazine ranked Bakrie as the country's richest man, with a $9.2 billion fortune.
Bumi shares have tumbled 75 percent this year and are currently suspended. Its market capitalisation is $4.3 billion.
(Additional reporting by Saeed Azhar and Harry Suhartono; Editing by John Stonestreet) Keywords: BUMIRESOURCES (852 9864 8714; michael.flaherty@reuters.com) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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