Times Today20 Feb 2020 08:22
Doubts over Anglo American’s £405 million takeover of Sirius Minerals have deepened after the hedge fund run by Crispin Odey opposed the deal.
Odey Asset Management said that Anglo’s 5.5p-a-share offer “does not represent fair value for shareholders in Sirius” and claimed that the FTSE 100 mining group “would be willing to bid substantially more” for the North Yorkshire fertiliser mine developer.
The fund said that it had acquired a 1.3 per cent economic interest in Sirius this week and would vote against Anglo’s offer unless it was declared “final”. In an attempt to elicit a better offer, it committed to vote in favour of any bid priced at 7p a share or higher.
Crispin Odey is hoping to encourage a higher offer for Sirius
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The intervention from Odey is deeply unhelpful for bosses at both companies as they try to convince furious shareholders in Sirius, including tens of thousands of retail investors who are facing heavy losses, that the deal is the only option to prevent bankruptcy. Anglo’s offer will be put to shareholders at a vote on March 3, when it must secure a majority by number of those voting and 75 per cent by value.
Sirius is developing the Woodsmith mine near Whitby to extract polyhalite from a mile beneath the North York Moors National Park. The company recommended the takeover from Anglo — despite what Chris Fraser, its chief executive, admitted was a “disappointing” price — after failing to secure funding to complete the project itself.
Anglo, which today is expected to report annual earnings of $10 billion, is one of the world’s biggest mining groups, with interests ranging from copper to diamonds. Crispin Odey, a Tory donor and Brexiteer, is famed for betting on a crash in the pound after the Brexit referendum and is understood to be nursing heavy losses from shorting Tesla. His portfolio manager leading the intervention into the Sirius deal is Henry Steel, a former Rio Tinto employee who has since shorted one of Rio’s biggest projects.
Odey’s move appears to rest on a gamble that Anglo will not be prepared to let the deal fail and will buy Sirius out of administration instead, given that this could introduce uncertainty into its acquisition of what it has described as a “world-class” mining project.
The vote is made more unpredictable by a volatile Sirius shareholder register. The company had 85,000 retail investors as of December 2018, but it is not known how many remain, nor how many of those that hold their shares through investment platforms will opt to exercise voting rights.
Sirius yesterday reiterated that it faced a “stark choice” with a “high probability” that it would be placed into administration if the takeover failed.
Some retail investors have suggested that they are willing to lose everything to spite Sirius management, while others are desperately seeking to find alternative solutions. These include a group running a Fund Sirius campaign to try to demonstrate to the c
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