Potash miner saved despite backlash
Anglo American seals Sirius Minerals deal
AN AMBITIOUS project to build a potash mine in the North York Moors has been saved from collapse despite a backlash from furious shareholders.
Sirius Minerals investors voted in favour of a £405m rescue takeover put forward by FTSE 100 mining giant Anglo American.
Just over 80pc of votes were cast in favour and nearly 20pc against. That meant the result was close as Anglo needed to secure the support of 75pc of votes for it to pass.
It was expected to be a close call after angry retail investors pledged to vote it down because they felt it undervalued the company.
Anglo offered 5.5p per share to buy Sirius, which is much less than many private shareholders will have paid for their stock.
Sirius had an estimated 85,000 private investors who held around 50pc of its shares. This is a much higher proportion than for most companies.
The voter turnout was around 43pc – which is higher than the roughly one-third who tend to vote at Sirius meetings.
Sirius bosses insisted it would run out of money and collapse within weeks if Anglo’s offer wasn’t voted through.
It has spent years developing a huge mine in the North York Moors national park, near Whitby, to access a naturally occurring fertiliser called polyhalite.
Chairman Russell Scrimshaw said: ‘The positive outcome from today’s meeting secures a return for shareholders, and provides greater certainty in terms of safeguarding the project, protecting the jobs of our employees, and allowing the community, region and the UK to continue to benefit from the project.’
Sirius has estimated that its sprawling Woodsmith Mine would generate £100bn for the UK economy over the next 50 years.
The result of the vote, which was released late last night, came after a meeting in London where angry shareholders grilled bosses about the deal and why the company has ended up on the brink of collapse.
Sirius installed extra security guards at the meeting in the City after what Scrimshaw described as online ‘abuse’ and ‘threats of violence’ against management.
Sirius was trading at 24p a share last April and peaked at around 44p in August 2016. But the shares collapsed last September after it failed to raise £400m that would have given it access to more cash needed to complete the mine, after the Government declined to commit to guaranteeing funding.
Shareholders rallied together to urge the company to either get a better offer from Anglo or find an alternative deal that would have seen it stay on the stock market.
Cliff Weight, a director at investor body ShareSoc who oversaw a Sirius Shareholder Group, said: ‘Many individual shareholders will be thankful that they get 5.5p – which was the only offer on the table.
‘The 20pc backlash is very high and reflects the enormous dissatisfaction of many individuals who financed this project in its early stages and, very sadly, have now lost significant sums.’
Major institutional shareholder Jupiter Asset Management urged the company to seek a better offer, and hedge fund Odey Asset Management last week said it would vote against the deal. Chief executive Chris Fraser ( pictured) yesterday said: ‘This is not a great price, but it is the price, and the alternative is most likely administration.’