ASX-listed gold explorer Nusantara has received a takeover bid from its largest shareholder, and local partner, Indika Energy.

In a statement to shareholders, the Indonesian-based Nusantara announced it has entered a binding Scheme Implementation Deed with Indika, for all issued share capital not already owned by the company.

Indika currently holds 28% of issued shares in the company.

Under the terms of the agreement, Indika is offering $0.35 per share – which represented a 19% premium to Nusantara’s 5 day volume-weighted average price when the statement was issued on Monday, 28 June. This values the company at around $80 million.

The offer has already received the full support of Nusantara’s independent board committee (IBC).

The arrangement would also provide investors with liquidity, something Nusantara’s shares have struggled to maintain in recent months.

The IBC recommended that unless a superior offer is received, shareholders should vote in favour of the offer (pending an independent expert review).  

“The Indika proposal was welcomed by the independent directors and comes at an opportune time for Nusantara shareholders to crystallize value, and de-risk their investment in the company,” Nusantara chair Greg Foulis said.

“Awak Mas [the company’s flagship project] is at a key inflection point and the transaction removes a variety of risks associated with progressing the project from feasibility to production.”

FEED progress update

The takeover offer comes as Nusantara announced the preliminary deliverables and independent review of capital and mining costs as its Awak Mas front end engineering and design (FEED) contracts have been completed.

PT Masmindo Dwi Area – a 75%-owned subsidiary of Nusantara – is overseeing the FEED process for the company, and preliminary cost estimates and implementation schedules were received from PT Petrosea TBK in March this year.

Masmindo appointed two companies, PT SMEC Denka Indonesia and PT Mining One Indonesia, as independent consultants to complete cost and scheduling estimates.

This review indicated the capital costs for Awak Mas will be higher than was reported in the June 2020 Definitive Feasibility Study (DFS) addendum. An update to the DFS will be provided next month.

To stay updated with the latest company news and announcements, please register your details on Nusantara’s investor centre.

Reach Markets have been engaged by NUS to assist with private investor management.

Sources:

• ASX: Nusantara announcement – 28 June 2021
• ASX: Nusantara announcement – Feed Progress Update – 28 June 2021
• ASX: Lion announcement – 28 June 2021
• Stockhead: Indika takeover bid values Nusantara at $80m