Kangaroo Resources’ board endorses PT Bayan takeover bid

Kangaroo Resources ASX KRL PT Bayan takeover thermal coal Indonesia East Kalimantan
PT Bayam's takeover bid of A$0.15 per share for Kangaroo Resources values the company at a 615% premium to its three-month VWAP of A$0.0297 prior to 8 May.

Kangaroo Resources’ (ASX: KRL) board has unanimously endorsed a takeover bid from its major shareholder PT Bayan Resources that values Kangaroo at a 275% premium to its 4 May closing price of A$0.04.

PT Bayan currently holds a 56.05% stake in Kangaroo and it has offered A$0.15 per share to the minority shareholders of Kangaroo to lock-in the remaining 43.95% interest.

This morning’s announcement spurred Kangaroo’s share price up more than 46% to reach A$0.13 by late morning trade.

The offer is also a 615% premium to the three-month volume weighted average price of A$0.0297 prior to the 8 May announcement that reported PT Bayan and Kangaroo were entering a confidentiality agreement.

However, the takeover has a few hurdles to jump before its becomes official including securing shareholder approval with minority holders possessing 75% of the total vote.

Additionally, other regulatory approvals need to be obtained including one from the Australian Foreign Investment Review Board.

The indicative timetable for the acquisition puts the implementation date at 6 December.

Kangaroo’s coal assets

Kangaroo is advancing its Pakar North, Pakar South and the Graha Panca Karsa (GPK) thermal coal projects in Indonesia’s East Kalimantan region.

The company has an underlying contract with PT Bayan to use 30% of its infrastructure including its Tabang haul road and Senyiur Port.

A strategic agreement is also in place between the parties to facilitate each other’s coal projects and share infrastructure to allow both companies to optimise outputs from their respective projects.

Drilling at GPK was carried out late last year and comprised 543 holes for 12,529m and unearthed to main seam groups which had an average vertical thickness of 4.4m and 1.3m.

An application for follow-up drilling is being prepared with plans to submit it before the end of the current quarter.

Also, a contractor has been appointed to drill the Pakar North project with the program pencilled in to begin this quarter.