Alternative option to Anglo American's takeover 'is not viable', Sirius Minerals is told

The only alternative proposal to Sirius Minerals being taken over "is not viable," the company's board of directors have been told.

Friday, 14th February 2020, 4:25 pm
Updated Friday, 14th February 2020, 4:26 pm
Sirius Minerals' HQ.

Earlier this month, one of Sirius' largest shareholders came forward to urge the company to explore options other than Anglo American's offer.

This included a proposal for a $680m funding package submitted by a consortium of financial investors earlier in January.

However, Sirius has confirmed today that without an institutional anchor investor providing the majority of the equity required to meet the proposal's requirements, the consortium of financial investors "do not consider the Alternative Proposal to be viable".

In its announcement, Sirius said: "The Board confirms that the Company has not been able to secure an institutional anchor investor willing to provide sufficient support for the Alternative Proposal which was part of the consortium's requirements. Without an institutional anchor investor providing the majority of the equity required, the consortium of financial investors have informed the Board that they do not consider the Alternative Proposal to be viable and have therefore ceased discussions with the Company."

In order for this alternative deal to go through, Sirius would have had to "undertake a substantial new equity raising", obtain concessions from some of its major creditors, certain local authority approvals and further due diligence.

As it stands, the company is still urging shareholders to back Anglo American's offer at 5.5p per share (£405 million) or the company could go bust.