RE: Times Today15 Feb 2020 06:33
And a second article by a different scribe
Fertile ground
Financial black holes have long been a magnet for retail punters — as Eurotunnel memorably proved. Ditto Sirius Minerals: a similar project, only directed towards polyhalite rather than Paris. The company has 85,000 retail investors, not all overly chuffed to have been pulled out of the fertiliser by a £386 million bid from Anglo-American at just 5.5p a share.
Sirius has just warned them again that if they don’t back the takeover, the company will go bust, leaving them with nothing. But having seen the shares crash from 40p, some apparently don’t care, preferring to spite Chris Fraser, the Sirius boss who enticed them down the mine.
On the face of it, they could have the firepower, too. The bid is via a scheme of arrangement, with the vote at a meeting on March 3. And, as the prospectus notes: for the deal to go through, it requires “the approval of the majority in number” of voting shareholders “representing not less than 75 per cent in value” of the votes. And, by number, retail investors dwarf the institutional ones, as well as accounting for about half the register by value.
Their problem? That most retail shareholders hold their stock via investment platforms, such as Hargreaves Lansdown. And, as the Unilever farrago showed, the platforms typically vote the holdings in a single block unless individual investors liberate theirs: something usually requiring a fee and hassle.
Even so, the vote is not yet a slam dunk. Voting down the deal to see Sirius go bust would be daft. But could enough Sirius investors band together to force Anglo to sweeten its terms? Anglo insists it won’t do that. But hedge funds are always trying this sort of brinkmanship.
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