Mining giant Anglo American WAS ready to sweeten £405m Sirius bid
Anglo American considered offering Sirius Minerals investors shares in Anglo itself as part of its takeover bid, the MoS can reveal.
The mining giant behind the controversial £405million takeover of Sirius Minerals looked at the plight of 85,000 small shareholders in the fertiliser miner who face big losses because they had bought into the Yorkshire firm at a higher price than the 5.5p per share being offered by Anglo American.
The alternative idea would have allowed Sirius investors to own Anglo American shares, giving them a likely future return from Sirius’s potentially lucrative mine.
Anglo American chief executive Mark Cutifani has insisted his offer for Sirius is ‘fair and reasonable’
It could have softened the blow for the small shareholders in Sirius – many of them locals who have ploughed life savings and pension pots into the company, which faces going bust after running out of money to complete the potash mine near Whitby.
A City source said: ‘Anglo did not want to be seen to be encouraging large numbers of not very well-informed shareholders to buy stock in a company that they know nothing about.’
Anglo American chief executive Mark Cutifani has insisted his offer for Sirius is ‘fair and reasonable’.
He told the MoS: ‘We do understand the issue where people may have bought in [to Sirius] at a higher price and we are sympathetic. But we believe the offer we put on the table is appropriate.’
The mine needs a further £2.4billion to start producing its reserves of polyhalite, a form of potash, which will be transported to the coast via a 23-mile tunnel for processing and export.
Cutifani said the project could become one of Anglo’s most prized assets. But he added: ‘There’s still a long way to go on development.
The key risk in our head is the marketing. Polyhalite is a new product in the market, so that would take time to sell to potential customers.’
Sirius shareholders are furious that a project they were told could deliver them huge riches now looks like costing them a fortune.
Anglo American were willing to sweeten their bid for Sirius which has so far proved unpopular with Sirius stakeholders
However, shareholders have been warned by Sirius chief executive Chris Fraser that Anglo’s bid is the only way to save the company.
Attempts to raise money on the markets have fallen flat and the Government appears uninterested in bailing out the firm.
Sirius shareholder Ian Martignetti said the Anglo offer is still ‘wide of the mark’. He added: ‘If Anglo had offered between 12 and 13p, plus shares, the bid wouldn’t have felt so greedy.’
Last week, hedge fund Odey Asset Management lent its support to Sirius’s small investors, who are so angry they are threatening to block the takeover at next week’s shareholder vote.
In a joint letter to the boards of Sirius and Anglo, the Mayfair firm said Anglo’s bid ‘made a mockery’ of the equity value of Sirius, which was valued in September at £893million – 120 per cent higher than the Anglo offer.
It added that the current bid ‘does not reflect fair value’ and said it would support an offer of 7p or higher.
Odey Asset Management, run by Crispin Odey, has bought a 1.29 per cent stake in Sirius at an average of 4.9p per share and could derail the deal if it wins support from other institutional shareholders.
Jupiter Asset Management, where Odey’s wife Nichola Pease will become chairman next week, has a 7.8 per cent stake in Sirius. It has also spoken out against the Anglo American deal, calling on the Sirius board to pursue ‘any alternative options’ ahead of the takeover deadline.