(Alliance News) - UK fertiliser project development Sirius Minerals confirmed Wednesday it is in advanced talks with blue-chip miner Anglo American about a possible takeover over.
The talks regard a possible cash offer of 5.50p per Sirius share, which represents a 34% premium to the firm's last closing price of 4.10p. Based on this last closing price, shares in Sirius have slumped more than 80% over the past 52 weeks. A year ago, the stock traded at almost 22p.
The offer would value Sirius at a whole at GBP386 million.
There can be no certainty that any firm offer will be made, said Sirius, though the board has indicated to Anglo that it expects to be able to recommend an offer if made at the proposed price.
Anglo confirmed the talks, saying it identified the project as being "of potential interest some time ago". The possible offer could bring "certainty" to Sirius shareholders whilst Anglo brings "financial, technical and marketing resources and capabilities" to progress to project.
In September, Sirius announced it had struggled to secure the required funding for its North Yorkshire polyhalite mine due to "market conditions". Consequently, the firm intended to slow the development of the mine. Sirius then came up with a two-stage development plan to a de-risk milestone of first polyhalite, with an upfront capital requirement of USD600 million.
Sirius shares were up 22% early Wednesday, while Anglo was down 1.9%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 7,550.38
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Hang Seng: down 0.9% at 28,056.73
Nikkei 225: closed down 1.6% at 23,204.76
DJIA: closed down 119.70 points, 0.4%, at 28,583.68
S&P 500: closed down 0.3% at 3,237.18
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GBP: up at USD1.3154 (USD1.3118)
EUR: up at USD1.1152 (USD1.1138)
Gold: up at USD1,588.30 per ounce (USD1,568.77)
Oil (Brent): up at USD69.00 a barrel (USD68.02)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
0830 GMT UK Halifax house price index
1000 CET EU eurozone economic outlook
1100 CET EU business climate & Economic Sentiment indicators
0700 EST US MBA weekly mortgage applications survey
0815 EST US ADP national employment report
1030 EST US EIA weekly petroleum status report
1500 EST US consumer credit
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The UK condemned Iran's missile attacks on Iraqi bases housing coalition military, and voiced concern over "reports of casualties" from the strikes. "We condemn this attack on Iraqi military bases hosting Coalition - including British - forces," said Foreign Secretary Dominic Raab. "We are concerned by reports of casualties and use of ballistic missiles." Iran fired missiles Wednesday at Iraqi bases housing the US military, officials in Washington and Tehran said, in the first act of the Islamic republic's promised revenge for the US killing of a top Iranian general. Launched from Iranian territory and by Iranian forces not a proxy, the attack marked a new turn in the intensifying confrontation between the US and Iran and sent world oil prices soaring. There was no immediate suggestion of any link to the missile strikes but a Ukrainian airliner crashed shortly after takeoff from Tehran early Wednesday with the loss of at least 170 people on board. The Pentagon said it was still "working on initial battle damage assessments" after "Iran launched more than a dozen ballistic missiles against US military and coalition forces in Iraq". "It is clear that these missiles were launched from Iran and targeted at least two Iraqi military bases hosting US military and coalition personnel" at Ain al-Asad and Arbil, the Pentagon said.
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UK Prime Minister Boris Johnson was on Wednesday expected to tell Ursula von der Leyen that Britain will not extend the Brexit transition period, in their first face-to-face meeting since she became European Commission chief. Downing Street said Johnson will call for the EU and Britain to work out "a confident and positive future relationship" by the end of December, when the implementation period – designed to cushion the effects of Brexit – is due to end. "Having waited for over three years to get Brexit done, both British and EU citizens rightly expect negotiations on an ambitious free trade agreement to conclude on time," his office said. "There will be no extension to the Implementation Period, which will end in December 2020." Lawmakers on Tuesday began three days of debate to enshrine Johnson's Brexit divorce deal into law, with few hurdles to its passing expected after he won a comfortable majority at last month's elections.
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German new factory orders were down in November, the country's Federal Statistics Office said, with foreign orders falling sharply. In November 2019, price-adjusted new manufacturing orders were down 1.3% compared to October and were down 6.5% compared to November 2018. Market consensus, according to FXStreet, was for a 0.3% rise in orders. Domestic orders increased by 1.6% in November but foreign orders fell by 3.1% on the previous month. New orders from the euro area were down 3.3%, new orders from other countries decreased 2.8%.
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BROKER RATING CHANGES
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UBS RAISES GLENCORE TO 'BUY' (NEUTRAL) - PRICE TARGET 270 (250) PENCE
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JEFFERIES CUTS ELEMENTIS TO 'HOLD' ('BUY') - TARGET 190 (180) PENCE
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GOLDMAN CUTS SPIRENT COMMUNICATIONS TO 'SELL' ('NEUTRAL') - TARGET 175 (195) PENCE
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COMPANIES - FTSE 100
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J Sainsbury reported a sales fall in its third quarter, a period which includes the pivotal Christmas and Black Friday trading spells, though sales in groceries alone edged higher year-on-year. In the 15 weeks to January 4, total retail sales, excluding fuel, were down 0.7% from last year. Including fuel, sales were down 0.9%. On a like-for-like basis, sales excluding fuel also were 0.7% lower year-on-year, but the like-for-like decline stretched to 1.1% when including fuel sales. Grocery sales rose 0.4% from a year ago, with online grocery sales alone up 7.3%, Sainsbury's reported that a record 385,000 customers ordered groceries online in the week before Christmas.
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Barclays is to face calls from shareholders at its annual general meeting to phase out its financing of fossil fuel firms that are not aligned with the Paris climate agreement, a London-based environmental charity said. A group of 11 institutional investors in the bank, managing over GBP130 billion, alongside 100 individual shareholders, backed by charity ShareAction, have filed a resolution which will be voted on at Barclays's annual general meeting in May. The 11 institutional investors include Brunel Pension Partnership, a UK pension fund, and Sarasin & Partners, an asset manager with more than GBP132 billion of assets under management.
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COMPANIES - FTSE 250
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Greggs once again upgraded its profit guidance following a strong end to an "exceptional year". Total sales were up 14% in 2019, nearly double the 7.2% rate seen in 2018. Company-managed shop like-for-like sales were up 9.2%, vastly outpacing the 2.9% growth in 2018. As a result of this strong performance, full-year underlying pretax profit is expected to be slightly higher than previous expectations. This is the third guidance upgrade from Greggs for 2019, having boosted its outlook in both November and February. "We delivered a strong finish to what has been an exceptional year for Greggs. The major investments we have made in recent years to make Greggs an attractive choice in the food-on-the-go market are delivering," said Chief Executive Roger Whiteside. "Looking to the year ahead, we face strong sales comparatives and cost inflation headwinds present a challenge," said Whiteside. "However, with strong momentum in the business we see further growth opportunities across a number of channels as we invest in new ways to make Greggs more accessible and convenient for customers."
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Finablr said travel money unit Travelex has been successful in containing the spread of ransomware known as Sodinokibi, which was detected on new year's eve. Travelex confirmed that whilst there was some data encryption, there is no evidence that "structured" personal customer data has been encrypted, and also no evidence that any data has been stolen. Travelex is gradually restoring a number of internal systems and is working to resume normal operations as quickly as possible, said Finablr.
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COMPANIES - INTERNATIONAL
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Samsung Electronics's operating profit fell by more than a third in the fourth quarter, the world's biggest manufacturer of smartphones and memory chips estimated. Samsung was hit by a series of difficulties in 2019, with chip stockpiles bloating and prices falling, in contrast to the booming market of previous years. The premium smartphone market has also grown fiercely competitive with buyers waiting longer before upgrading to new models. But the figures beat expectations, analysts said, with chip demand starting to improve and strong smartphone sales. The forecast represented a relative improvement – in each of the first three quarters of 2019 net profits fell by more than half year-on-year.
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Wednesday's Shareholder Meetings
Sabien Technology Group
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By Tom Waite; thomaslwaite@alliancenews.com
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Anglo American (AAL)
Spirent (SPT)
Glencore (GLEN)
Elementis (ELM)