Bumi Resources: Step-up acquisition and share matching awards (BUMI, Rp2,950, Buy, TP: Rp3,700) - Mandiri

􀂄 Last week Bumi Plc announced its application for 1.299mn new Bumi Plc’s voting ordinary shares to be admitted to the premium listing segment and London stock exchange, of which 1.179mn shares new Bumi Plc’s voting shares as consideration part of the BUMI’s Step-up acquisitions program announced on 30 June 2011 to increase ownership in BUMI up to 32.1%. While 120k shares has been allotted to the Share Matching Award Directors.
􀂄 Upon admission the total number of ordinary shares in Bumi Plc will be 224.9mn shares, in which voting right will be 157.0 mn shares and 67.8mn shares will be suspended voting ordinary shares.
􀂄 The transaction is a bit slower than our expectation but remain on track with company’s plan. Despite we find it challenging for Bumi Plc to increase its ownership in BUMI up to 51% (40% is more likely), Bumi Plc has been incorporated in UK to become the parent company of the Group so it could have less than 50% free float once the scheme become effective. Premium listing to FTSE100 is a critical moment for the Group since it will increase global capital inflow and support fund raising forward.
􀂄 Currently we have Buy rating on the stock, BUMI is traded at 14.3x-12.1x PER11F-12F.