Times Today5 Mar 2020 11:11
Bankers and lawyers make Sirius money
Emily Gosden, Energy Editor
Thursday March 05 2020, 12.01am, The Times
Banking
Sirius has spent more than $1 billion developing its Woodsmith mine near Whitby to mine polyhalite for use as fertiliser
Sirius has spent more than $1 billion developing its Woodsmith mine near Whitby to mine polyhalite for use as fertiliser
ANDREW MCCAREN FOR THE TIMES
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Bankers and other advisers working on Anglo American’s takeover of Sirius Minerals are set to earn £23 million in fees after the deal which left thousands of retail investors nursing heavy losses was voted through.
Shareholders continued to vent their anger yesterday over the 5½p-a-share takeover of the North Yorkshire fertiliser mine developer in which some have lost tens of thousands of pounds.
The £405 million deal was narrowly approved at a vote on Tuesday after Sirius warned that the only likely alternative was for it to go bust, wiping them out altogether.
Anglo’s financial advisers, Bank of America and Centerview Partners, are expected to share in £10.8 million while Linklaters is in line for £3.5 million for legal advice. Sirius’s financial advisers, JP Morgan and Lazard, and brokers, Liberum and Shore Capital, are expected to share in £5.2 million in fees while Allen & Overy is in line for £2.3 million in legal fees.
Others walking away better off include Odey Asset Management, the hedge fund that bought in to Sirius after the takeover was announced and voted against the deal as it pushed unsuccessfully for a higher offer. It is estimated to have made about £1 million, having bought in while shares were trading below the offer price amid uncertainty over whether the deal would pass.
Sirius has spent more than $1 billion developing its Woodsmith mine near Whitby to mine polyhalite for use as fertiliser. The Anglo takeover came after it failed to raise the $3 billion needed to complete the mine through a financing structure backed by JP Morgan.
The investment bank has attracted particular ire from shareholders because Sirius has said that it could have completed a crucial $500 million bond issue to secure the financing if JP Morgan had not refused its request to include warrants in the offering.
JP Morgan Asset Management, a separate part of the banking business, has at points betted against Sirius, prompting one shareholder at its general meeting on Tuesday to question whether there had been “a conflict of interest given part of their organisation was heavily shorting” Sirius.
Thomas Staley, Sirius’s finance director, said he did not believe there was a conflict because JP Morgan was “set up appropriately for them to conduct the various activities they do”. JP Morgan declined to comment.
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