Most shareholders would veto Rothschild's ARMS bid -Argyle

(Recasts, adds response from Rothschild)

By Fergus Jensen

JAKARTA, May 13 (Reuters) - An investment vehicle supported by Indonesia's Sinar Mas Group says shareholders in its bid target Asia Resource Minerals (LSE: ARMS.L - news) would reject a rival $100 million offer from financier Nathaniel Rothschild if a vote on the offer goes ahead.

The battle for control of Asia Resource, parent of Indonesian miner Berau Coal Energy, has revived with uncertainty surrounding restructuring plans and the future of Berau's $950 million of outstanding U.S. dollar bonds.

On Tuesday, the Asia Resource (ARMS) board adjourned indefinitely a meeting to vote on a $100 million recapitalisation plan proposed by Rothschild's trust NR Holdings (NRH), effectively blocking a rival bid by Asia Coal Energy Ventures (ACE), a vehicle managed by hedge fund Argyle Street Management and funded by Sinar Mas.

The ACE bid is dependent upon shareholders voting against Rothschild's open offer.

"We are actually not aware of any shareholder who is going to vote yes, and they must know that as well," Argyle Street Management partner Kin Chan told Reuters.

ACE has an estimated 52 percent of votes that would be cast against NR Holdings' proposal and its backers include Raiffeisen Bank International (RBI), Standard Chartered (Other OTC: SCBFF - news) and former ARMS chairman and Indonesian coal business tycoon Samin Tan, Chan said. Argyle holds a 4.65 percent stake in ARMS.

Rothschild, however, said Argyle had not secured RBI support since this also depended on a vote against his own bid.

"A condition of their bid is that shareholders have voted down the NRH refinancing offer, which has now been delayed until after ACE makes its 'offer on June 4' so ACE is 'stuck,'" he told Reuters via email.

"In reality ACE has neither RBI's or Standard Chartered's 'unconditional' support as ACE would like to have us believe," a spokesman for NRH said. "As a result, ACE is being forced to make a series of highly misleading statements, when it has little prospect of gaining any acceptances, let alone 50.1 percent of shareholders."

Share (LSE: SHRE.L - news) prices in Asia Resource have climbed to match the ACE offer of 41 pence ($0.65) per share, said Fuganto Widjaja, who heads the Sinar Mas unit behind the bid. "(This) shows everybody is waiting for this to happen," he said.

"The company is supposed to be independent but with the board siding with a minority shareholder trying to have de facto control it just frustrates the higher evaluation," he said noting that Sinar Mas had secured financial backing for its bid and proven experience managing coal mines in Indonesia.

"How is that doubtful?"

Rothschild, the second-largest shareholder in ARMS with an approximately 18 percent stake, offered in November to raise his stake, proposing to underwrite a share sale to help cut debt.

($1 = 0.6344 pounds) (Additional reporting by Cindy Silviana in Jakarta and Silvia Antonioli in Singapore; Editing by Miyoung Kim, Louise Heavens and David Evans)