Mining giant tables £405m bid for Sirius Minerals
Furious investors urged to back Anglo American takeover
SIRIUS Minerals has warned investors it is likely to collapse within weeks unless they approve a £405m rescue deal from a mining giant.
Anglo american formally offered to buy the yorkshire potash miner for 5.5p per share yesterday.
the bid came after the two companies revealed earlier this month they were in advanced talks about a takeover. the move surprised the City and infuriated the 85,000 private shareholders who spent years backing the project with their own cash but now feel betrayed.
an investor who bought £10,000 of shares when they peaked above 40p each in 2016 would be left with a holding worth just £1,250 from the anglo american deal.
But Sirius chairman russell Scrimshaw said that while the price will be a ‘shock’ to many, anglo’s lifeline is the only ‘feasible option’ to save the sprawling fertiliser mine and thousands of jobs it promised to bring to the local area.
according to Scrimshaw, Sirius received another approach shortly after anglo’s interest was first revealed. But the board decided anglo’s offer, which will see it largely sticking to Sirius’s construction timetable.
Scrimshaw warned: ‘If the acquisition is not approved by shareholders and does not complete, there is a high probability that the business could be placed into administration or liquidation within weeks.’
Michael Hewson, chief market analyst at CMC Markets, said: ‘Sirius’s longer-term shareholders might be reluctant to take such a big hit, however, there aren’t any other offers on the table.’
One shareholder told the Mail: ‘I am a long-term holder who has lost more than £100,000,’ adding that ‘the private shareholder has served his purpose and has now been royally shafted’.
Mark Cutifani, anglo’s chief executive, said he was ‘sensitive’ to the fact that many Sirius investors will have lost money in the project, but did not comment on why they were not being offered stock in anglo’s offer.
He added that Sirius chief executive Chris Fraser and several other executives would stay in their roles for at least a year.
they will continue to receive their current remuneration package and also participate in bonus schemes. In 2018, Fraser, a former investment banker, received a basic salary of £475,000 and a bonus of the same amount. Figures for 2019 are not available.
Sirius has been struggling to stay afloat since it failed to raise £400m of funding in September. the bond was needed to unlock a further £2bn of funding which it needed to finish building the mine under the North york Moors national park ( pictured).
Building the mine, which would access the largest known reserve of a fertiliser called polyhalite, involves sinking two one-mile shafts and digging a 23-mile tunnel that will transport the minerals to a plant on teesside. When the fundraising fell apart, Sirius stripped out costs, went to a bare-bones construction schedule to keep costs low and began looking for a strategic partner.
Sirius reckoned it needed £2.5bn in total to build the mine, which it insists would be low-cost to run and could produce polyhalite for 50 years. anglo does not expect there to be any ‘major changes’ in employee numbers. Sirius has estimated it will create 4,000 jobs in one of the most deprived areas of the country.