Wed, 04 Mar 2020 | BUSINESS SALE
Mining concern Sirius Minerals is set to be sold for £405 million, after a rebellion against the sale by several small investors failed to prevent the deal.
The offer, from Anglo American Plc, was approved by 80.28 per cent at a shareholder meeting in which over 1,300 investors cast their vote. The threshold for approval was 75 per cent.
Sirius is building a £4 billion deep mine on the North Yorkshire Moors near Whitby, the first of its kind in the UK for 40 years.
The price offered by Anglo American angered some shareholders, who stand to lose pension money and savings after investing in Sirius at higher prices than the 5.5p per share Anglo will pay.
Directors on the Sirius board recommended the sale since Anglo made the offer after Sirius failed to raise sufficient funds to complete the project and risked running out of money.
The board argued that the alternative was the company entering administration, at which point Anglo could have acquired it from administrators, leaving investors with nothing.
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.”
The offer is still subject to approval by competition authorities, while directors have said the mine requires another $1.3 billion of investment in order to be completed.
Sirius first unveiled plans to build a polyhalite mine under the North York Moors a decade ago and built support by rallying around 85,000 small investors to fund the undertaking.
However, a failed £400 million bond issue caused its share price to fall and Sirius announced it had no funding alternatives and had to accept Anglo American’s offer.
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