(Agencies/China Daily)
Updated: 2008-01-31 10:32

PT Aneka Tambang and Shenzhen Zhongjin Lingnan Nonfemet Co offered 505 million Australian dollars ($449 million) in cash for Herald Resources Ltd, topping a rival bid to gain control of a lead and zinc project in Indonesia.

Antam, as the nickel mining company is known, and Chinese zinc producer Zhongjin Lingnan offered 2.50 Australian dollars a share, Perth-based Herald said in a statement. The stock is trading above this price, indicating some investors expect a higher proposal. PT Bumi Resources, Indonesia's largest coal producer, had bid 2.25 Australian dollars .

Herald has waited two years for approval for the $192 million Dairi mine. A joint bid by Antam, majority-owned by the Indonesian government, and Zhongjin Lingnan may ensure the project goes ahead.

"It would be easier for Antam to get all the necessary licenses than Bumi" considering it's owned by the government, said Freddy Hendradjaja, who helps manage $581 million at PT Danareksa Investment Management including Antam stock, in Jakarta.

Herald rose eight cents, or 3.2 percent, to 2.58 Australian dollars on the Australian Stock Exchange in Sydney yesterday. Antam shares jumped as much as 12 percent to 3,650 rupiah in Jakarta, the highest since January 21.

Herald's board unanimously recommends the joint bid in the absence of a higher offer, the company said in the statement to the Australian exchange. Antam is Indonesia's second largest nickel mining company by market value, and Zhongjin Lingnan is China's fourth biggest zinc producer.

Jakarta-based Antam is diversifying to reduce its reliance on nickel, which contributed 88 percent of revenue in the nine months to September 30. In September, the company signed a $1.5 billion pact with United Co Rusal, the world's biggest aluminum producer, to build an alumina plant in Indonesia, while in December it said it wants to buy gold mines.

Bumi made its hostile offer last month after talks with Herald over a six-month period faltered. Bumi fell 250 rupiah, or 3.8 percent, to 6,350 rupiah in Jakarta, halting a three-day, 22 percent advance. A successful bid would be the second largest Indonesian takeover of a foreign company.

"We are watching and waiting for full details," said Dileep Srivastava, head of investor relations at Bumi. "We continue to retain our interest in Herald and are happy to hold about 20 percent at a discounted price."