Shareholders in Sirius Minerals (LON:SXX), the British junior struggling to develop a huge fertilizer mine beneath the North Yorks Moors national park, approved on Tuesday a planned takeover by Anglo American (LON: AAL), despite several attempts to avoid it.
The decision followed a fractious shareholder meeting, flanked by security guards to monitor “credible threats” against directors, in which investors ultimately voted narrowly in favour of selling the company to Anglo American.
The two firms had agreed
in January to the £405 million-deal ($520m), seen as a much-needed lifeline
to the cash-strapped junior, which is halfway building its Woodsmith mine — the
UK’s biggest mining project in a generation.
Anglo’s offer of 5.5p a share is equivalent to one-third
more than the targeted company’s market value the day before the proposed takeover was made public.
Thousands of private investors had opposed the offer, as they bought shares at a much higher price. Most of those small shareholders bought in at around 25p and will lose large sums of their life savings as a result of the takeover.
Sirius was worth more than $2.3 billion 18 months
ago, before announcing in September its funding plans had failed,
adding it only had enough cash to last another six months.
Anglo American, which is looking to retreat from thermal coal, sees the
acquisition a its ticket back to the fertilizers business. The company owned
some phosphate assets in the past but in recent years has focused on “four
pillars” — copper, iron ore, diamonds and platinum.
It also adds a second major project to its $5bn Quellaveco copper mine in Peru, at a time when most
rivals are reluctant to expand.
The Woodsmith mine, poised to be one of the world’s largest
in terms of the amount of resources extracted, is set to generate an
initial 10 million tonnes per year of polyhalite, a multi-nutrient fertilizer,
containing four of the six key elements needed for plant growth — potassium,
sulphur, magnesium and calcium.