Vallar acquires Bumi, Berau in $3b transaction

London Stock Exchange-listed firm, which is controlled by Rothschild family Vallar plc announced its intention to create a London-listed Indonesian resources champion through the proposed purchase of 25% of Indonesian coal mining giants PT Bumi Resources Tbk and 75% of PT Berau Coal Energy for a combined consideration of approximately US$3.0 billion.

?The Transactions will bring together significant holdings in Indonesia's largest and fifth largest coal producers by production and resource base and will create a diversified international mining company built around a significant project pipeline of base metals and other minerals,? the company said.

The potential of the proposed Acquisition represents the delivery of the Vallar strategy announced at the time of its IPO to seek to create shareholder value through establishing a business with significant operations in the global metals, mining and resources sector with the intention of increasing its scale and profitability by efficiently deploying capital to expand and enhance current operations and by recruiting and retaining experienced and specialist industry personnel for key management positions.

Commenting on the proposed Acquisition: Indra Bakrie, proposed Chairman of Vallar, said: "Today's announcement will bring together the world class assets of both Bumi and Berau to create an Indonesian global mining champion and the only major Indonesian company to be listed on the London Stock Exchange. This will enhance our international profile, provide a currency and platform for development in the region and puts us in a much stronger position to build on the organic growth that our combined assets already provide. As a result, we expect to unlock significant value for shareholders."

Nathaniel Rothschild, proposed Co-Chairman of Vallar, said: ?We are delighted to have taken this important step to deliver on the strategy that we set out at the time of Vallar's IPO in identifying and acquiring these attractive assets. The structure that we established through the IPO has enabled us to act quickly to secure these high quality assets, which we believe will create value for our shareholders. I am also particularly pleased to be welcoming to the Board representatives of two such dynamic Asian business families and look forward to developing our strategy with them over the coming years."

Ari Hudaya, proposed Group CEO of Vallar, said: "It is a very exciting time to be a mining company in Indonesia. The fundamentals of the metals and mining sector are compelling, given the strength of demand from China and India, and we are ideally located to capitalise on that growing demand. Indonesia itself also offers us many exciting growth opportunities as power consumption continues to grow in this politically stable and economically strong country." (alex)

Transaction summary:
Vallar Plc ("Vallar" or the "Company") announces acquisition of holdings in PT Bumi Resources Tbk ("Bumi") and PT Berau Coal Energy Tbk ("Berau") Creation of London listed Indonesian coal champion

? Vallar to purchase 75% of Berau and 25% of Bumi

? Consideration of approximately US$3.0 billion made up of a combination of cash and new Vallar Shares

? Significant benefits identified for stakeholders in each of Bumi, Berau and Vallar through:
- maximising the potential of the largest coal producing assets in Indonesia
- leveraging management experience, industry relationships and access to capital
- exposure to the largest and fifth largest Indonesian coal producers by production (78Mt in 2010) with a significant resource base (12bn1, 2 tonnes in aggregate) and track record of profitability (EBITDA of US$350m3 and US$1,431m4 for Berau and Bumi respectively for last twelve months)

? Exposure to the fast growing Indonesian and pan-Asian region

? Intention to seek a Premium Listing on the Official List of the Financial Services Authority and trading on the Main Market of the London Stock Exchange and, subject to applicable laws, explore a potential listing on the Indonesia Stock Exchange

? Collaborative partnership with two of Asia's most dynamic business families

? Mandatory offer to be made to the minority shareholders of Berau and intention to increase ownership in Bumi during 2011

? The Board of Directors of Vallar will be led by Indra Bakrie and Nathaniel Rothschild and will have a strong Indonesian presence. Vallar's existing board representatives will remain (with the exception of Robert Sinclair) and the Company will have a majority of Independent Non-Executive Directors. Sir Julian Horn-Smith is to be appointed as Deputy Chairman and Senior Independent Non-Executive Director

? Bakrie Group will be the largest combined shareholder in Vallar with 43.0%5 of Vallar Shares and will have the right to nominate three directors including the position of Chairman, Chief Executive Officer and the Chief Financial Officer and will continue to control the management, operations and policy of Bumi

? Consistent with Vallar's stated strategy at the time of its initial public offering ("IPO")

? Vallar Plc will be renamed Bumi Plc