(Alliance News) - Anglo American PLC said Monday it has made a formal offer for Sirius Minerals PLC, valuing Sirius's equity at GBP404.9 million.
Anglo American is offering 5.50 pence per share in the London-listed potash mine developer, which reflects a 34% premium to the Sirius closing price of 4.10p on January 7, the last day before the start of the offer period.
Sirius Minerals's shares were 1.5% higher at 5.48 pence early Monday in London. Shares in Anglo American were up 0.1% at ZAR424.58 on Monday in Johannesburg, and 0.3% higher at 2,252.50 pence in London.
Earlier in January, Anglo American had said it was in advanced talks for the acquisition of Sirius Minerals, stating that it identified the North Yorkshire polyphalite project as "being of potential interest some time ago, given the quality of the underlying asset in terms of scale, resource life, operating cost profile and the nature and quality of its product".
Sirius Minerals itself said its directors consider the acquisition to be "fair and reasonable", and have recommended that shareholders vote in approval of the offer.
The offer is conditional on no fewer than 75% of Sirius shareholders voting in favour of the acquisition at an upcoming general and court meeting, as well as being sanctioned by the High Court of Justice in England & Wales.
Anglo American said it expects the acquisition to be completed by the end of March.
"Anglo American's recommended offer provides greater certainty for Sirius' shareholders, employees and wider stakeholders, while bringing the prospects for the development of this potential tier 1 project closer to reality," said Anglo American Chief Executive Officer Mark Cutifani
"We intend to bring Anglo American's financial, technical and product marketing resources and capabilities to the development of the project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area," Cutifani added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Anglo American (AAL)