A band of Sirius Minerals PLC (LON:SXX) private shareholders have set up an action group to raise £460mln in a bid to stop Anglo American plc’s (LON:AAL) takeover.
The cash would be raised through bonds offered to both institutional and private investors.
READ: Sirius Minerals is “quality” investment, repeats Anglo American
According to the ‘Fund Sirius Minerals’ group, a strategic review carried out in September concluded that the project needed £460mln to open the mine.
However, the troubled fertiliser company could not find that money and recommended shareholders to approve the takeover by Anglo American instead.
“At no point during or following the strategic review did Sirius reach out to private investors to request their support with the funding, despite them owning 50% of the shares in Sirius,” the action group said.
“We believe that this was an error on the part of Sirius and a missed opportunity to raise the funds and protect shareholders’ existing investments.”
The FTSE 100 giant’s offer was set at £405mln or 5.5p per share. A year ago, the stock was worth 20p.
“This offer significantly undervalues Sirius Minerals and if approved will result in significant losses for the vast majority of shareholders, which includes around 85,000 private investors,” Fund Sirius Minerals said.
Odey agrees
On Wednesday, hedge fund manager Odey Asset Management hammered the Anglo American deal, claiming it “does not represent fair value for shareholders” in Sirius. Odey holds a 1.3% stake in the Yorkshire firm.
According to Odey, the mining giant has not declared its £405mln offer as “final” deliberately “because there is a risk of both the deal failing at its current level, and of an interloper at a later stage”.
In case a third party starts takeover talks, the De Beers owner would be able to make a counter bid.
Anglo American defends deal
But on Thursday Anglo American reiterated the offer is “fair and reasonable” and an active fertiliser mine would benefit the area significantly.
Anglo American boss tells me that the Sirius Minerals is "fair and reasonable" give the outstanding capex requirements.
— Neil Hume (@humenm) February 20, 2020
“We understand how important this project is to the community of North Yorkshire. If we are successful, we bring certainty that at the moment is not there for the project and the community,” chief executive Mark Cutifani told The Times.
Sirius shareholders are meeting on 3 March to vote on the deal.
The stock was flat at 5.13p on Thursday morning.