Top Sirius Minerals shareholder urges company to look for options other than Anglo American

One of Sirius Minerals' largest shareholders is urging the company to look for alternative options before time runs out.

Tuesday, 4th February 2020, 2:48 pm
Updated Tuesday, 4th February 2020, 3:17 pm
Sirius Minerals has been urged to look for other options.

Global mining giant Anglo American is set to take over the company after Sirius' board of directors recommended its offer of 5.5p per share (£405 million) for approval.

Sirius described the offer as "the only feasible option" and warned shareholders that if the deal does not go through, the company could go bust "within weeks".

However, Jupiter Asset Management, one of Sirius' largest investors, is now calling on the company to look for "alternative options" - including reconsidering an offer rejected by Sirius at the start of January - to keep people's shares in the market.

Steve Davies, Manager of the Jupiter UK Growth Fund said: “We would like the Board to pursue any alternative options, including the consortium of financial investors who submitted a proposal for a $680m funding package earlier in January, within the remaining time available.

"We would like to be able to consider a standalone financing proposal that would enable shareholders to remain invested in the project, as an alternative to the existing takeover offer from Anglo American.”

Although details of this first offer were never revealed, Sirius mentioned it had been approached by a consortium of financial investors last December. Its debt financing proposal of £519 million, "the most advanced alternative proposal" to Anglo American's takeover, came through on January 9.

However, after reviewing the proposed terms and conditions of the offer, Sirius' board concluded that "the consortium’s conditions and the time it would take to meet such conditions were such that there is a very material risk that the overall funding package would not be implementable by the end of March 2020".

It added: "Based on the backdrop of the search for a standalone funding solution undertaken over the last four months and the extensive discussions held during that time-frame, the Sirius' board believes that, at this time, there is not likely to be an alternative to the acquisition other than administration or liquidation."

A vote on Anglo American's offer is expected to be held in the coming weeks.