Indonesian gold miner Archipelago Resources (AR.) has received a bid approach from its majority (52.6 per cent) shareholder Indonesian investment group PT Rajawali Corporation. The offer price of 58p a share values the Indonesian gold miner at £338m.
Archipelago confirmed that its board is recommending Rajawali's cash offer, which represents an 18.4 per cent premium to the previous day's closing price. Including its majority stake, Rawajali already has acceptances from 77.8 per cent of shareholders. The offer has come ahead of regulatory changes that would have rendered Archipelago subject to the UK takeover code despite being under foreign management control.
With unhedged production, Archipelago is particularly susceptible to spot price fluctuations, so April's slump in the gold price had a pronounced effect on the share price. Broker Westhouse believe that the offer price, although well short of its 71p target, was fair given the liquidity issues that the company "has struggled to address over recent years".
