Anglo Land

"Statement regarding possible offer

The Board of Sirius Minerals Plc ("Sirius" or "the Company") announces that it is in advanced discussions with Anglo American Plc ("Anglo American") regarding a possible all cash offer of 5.50 pence per Sirius share for the entire issued, and to be issued, share capital of Sirius (the "Proposal").

The Proposal represents a premium of:

-    34.1% to the closing price of 4.10 pence per Sirius share on 7 January 2020, being the last business day prior to the date of this announcement;

-    46.5% to the volume-weighted average price of 3.75 pence per Sirius share since the 17 September 2019 Strategic Review Announcement up to 7 January 2020;

-     53.4% to the one month volume-weighted average price of 3.59 pence per Sirius share up to 7 January 2020; and

-     61.7% to the three month volume-weighted average price of 3.40 pence per Sirius share up to 7 January 2020

Subject to the successful outcome of on-going discussions (including satisfactory assurances as to the safe-guarding of employee and other stake-holder interests and the agreement of the full terms and conditions of any offer), the Board of Sirius has indicated to Anglo American that it expects to be able to recommend a firm offer for Sirius if made by Anglo American at the price set out in the Proposal.

There can be no certainty that any firm offer will be made. Anglo American has expressly reserved the right to:

-    Reduce the offer consideration by the amount of any dividend or other distribution or return of capital which is paid or becomes payable by Sirius after the date of this announcement

-    Introduce other forms of consideration and / or to vary the composition of the consideration

-     Make an offer for Sirius at any time on less favourable terms:

With the agreement or recommendation of the Board of Sirius; or

If a third party announces a firm intention to make an offer for Sirius on less favourable   terms; or

If Sirius announces a "whitewash" transaction.

This announcement has been made with the consent of Anglo American.

In accordance with Rule 2.6(a) of the Code, Anglo American is required, by not later than 5.00 p.m. (London time) on 5 February 2020, being 28 days after today's date, to either announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Takeover Panel (the "Panel") in accordance with Rule 2.6(c) of the Code.

The person responsible for the release of this announcement on behalf of the Company is Nick King, General Counsel."

https://www.youtube.com/watch?v=FAx-Fqi_zrw

"J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the Prudential Regulation Authority (the "PRA") and regulated in the United Kingdom by the PRA and the Financial Conduct Authority. J.P. Morgan Cazenove is acting as financial adviser exclusively for Sirius and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Sirius for providing the protections afforded to clients of J.P. Morgan Cazenove, or for providing advice in relation to any matter referred to herein."

But will they build the mine to full production ...

https://www.angloamerican.com/

"Anglo American plc ("Anglo American") notes the announcement released today by Sirius regarding a possible offer for Sirius by Anglo American.

Anglo American confirms that it is in advanced discussions with Sirius in relation to a possible offer at a value of 5.5 pence per Sirius share, in cash (the "Proposal").  The Proposal would value the entire issued share capital of Sirius at approximately £386 million.

In September 2019, Sirius announced that it was undertaking a strategic review in order to assess the development plan for its North Yorkshire polyhalite project (the "Project") and an appropriate financing structure to provide relevant funding. Sirius also announced that the strategic review would include a broader process to seek a major strategic partner in the Project. In November 2019, Sirius provided an update on the progress of this strategic review, including a revised two-stage development plan.

Anglo American identified the 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. The Project has the potential to fit well with Anglo American's established strategy of focusing on world-class assets, particularly in the context of Anglo American's portfolio trajectory towards later cycle products that support a fast-growing global population and a cleaner, greener, more sustainable world.

Anglo American believes that the possible offer could provide certainty to Sirius' shareholders, whilst Anglo American brings the financial, technical and marketing resources and capabilities to progress the Project over time. This should also be in the interests of Sirius' broader stakeholders including employees and customers. Anglo American notes the following key attributes from its initial assessment:

-     Asset quality: Anglo American believes that the Project has the potential to become a world-class, low-cost and long-life asset. Sirius has progressed the development of the Project to an advanced stage, with construction now under way for over two years. Sirius has indicated that this is currently the world's largest known high-grade polyhalite deposit with a JORC Reserve of 290 million tonnes, with a grade of 88.8%, and a Resource of 2.69 billion tonnes. The Resource indicated by Sirius has the scale, thickness and quality to be mined efficiently using bulk mining methods through a relatively simple, low-energy, non-chemical production process. Sirius has indicated that the Project could operate at an EBITDA margin potentially well in excess of 50% leaving the Project well positioned for strong through-the-cycle profitability with a long anticipated asset life.

-     Development pathway: At this stage, the Project requires a significant amount of further financing to develop and commission the operation that has proven challenging for Sirius to procure on an economic basis. Anglo American, as one of the world's leading mining companies, has the resources and capabilities to help build on the achievements of the Sirius team. Anglo American remains committed to its disciplined capital allocation framework. During the first two years after an offer is successfully completed, development work on the Project is expected to be broadly in line with Sirius' revised development plan although Anglo American intends to update the development timeline, optimise mine design and ensure appropriate integration with its own operating standards and practices. Anglo American believes that there is the potential for long-term benefits from Anglo American's technical expertise in both the development and operational phases, as well as from Anglo American's recognised Operating Model to drive safety and productivity to world-leading standards. Integration into Anglo American's global Marketing network would provide full mine-to-market capabilities and build on Anglo American's institutional experience in the world's major fertiliser markets.

-     Premium product: Sirius' polyhalite product, POLY4, is a multi-nutrient fertiliser certified for organic use and has the potential to generate demand at a competitive cost that supports a strong margin. POLY4 is an attractive low-chloride alternative to traditional potassium-bearing mineral products on a cost-effective basis. It includes four of the six key nutrients that plants need to grow - potassium, sulphur, magnesium and calcium. The use of fertilisers is one of the most effective ways to improve agricultural yields and therefore help to address the anticipated future imbalance between food, feed and biofuel demand and supply caused by a fast-growing global population and limited additional land availability for agricultural use.

Anglo American reserves the following rights:

-     To reduce the offer consideration by the amount of any dividend or other distribution or return of capital which is paid or becomes payable by Sirius after the date of this announcement

-     To introduce other forms of consideration and / or to vary the composition of the consideration

-     To make an offer for Sirius at any time on less favourable terms:

with the agreement or recommendation of the Board of Sirius; or

if a third party announces a firm intention to make an offer for Sirius on less favourable terms; or

if Sirius announces a "whitewash" transaction

In accordance with Rule 2.6(a) of the Code, Anglo American is now required, by not later than 5.00 pm (London time) on 5 February 2020, the date 28 days after today's announcement, to either announce a firm intention to make an offer for Sirius in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for Sirius, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

There can be no certainty that any offer will be made.  A further statement will be made as appropriate."

https://www.angloamerican.com/investors/regulatory-news

So presumable (?) if you don't sell your shares and the offer takes place you get Anglo American shares ... eventually.

https://www.youtube.com/watch?v=jVqR2PwX428

And the mine gets built.

Oh "Its just a case of selling when the SP reaches 5.5p or waiting for the pay out - its a total cash offer so no shares in AAL."

To be continued...

https://www.youtube.com/watch?v=e-NDXtDUcGQ

There were two very interested parties.

You would expect the company to have the grace to make a recommendation or statement in plain language what this means for local stakeholders.

 

Tags: 

2 Comments

As Above So Below

Clearly there is some hostility in the community to this 'strategic partner' taking over lock stock & barrel.

So A to B :

Other than the monetary loss there is a sense of loss in lack of achievement and involvement by an investment of time, energy, research and a commitment to drive this project through to completion for the benefit of the area and the local economy.

Should AA or AN Other take over what needs to be considered is how to keep the local community and the trust built by Sirius over the years on board.

My question is would AA be prepared to set up a subsidiary ie Sirius with (shares traded seperately) until such a time when the mine is at 10mpta production?

That way Sirius have an umberella, everyone can still be involved and AA get to poke their noses in what is essentially a Star somin or other.

I feel a subsidiary coming on ... say 33% (a cheeky little number)

https://www.youtube.com/watch?v=Sy16VUmzj-g

Either way tis a bit of a mess as it now stands.

Keeps Digging..

http://staticcontents.investisdigital.com/media/a/anglo-american/plc/mp3...

"I’m here till they throw me out"

lol

"I’ve been thrown out of far better places than this."

That's the spirit..

"Shorts of the top five shorters droped from 6.46% to 5.37%
Highbridge and Polygon reduced their short (0.49% in total) on the 8th of Jan.
Citadel and Whitebox increased their short (0.15%) on the 7th and 8th of Jan.

They are all the SM CB or new CB investors. Some of their previous shorts were for hedging purposes.
The new shorts increased by Whitebox and Citadel indicate their negative view on the share price;
while Polygon has a more positive view as the deduction of shorts and increase long position in CFD.

Jupiter increased their holding before the announcement (327,719,269, 4.67% to now 547.2m, 7.79%), therefore, may be able to reduce their level of loss (in case the AAL bid is successful). They are now the largest SM investor.

So far, as seen from the RNSs in last two days, no big IIs had sold their shares. They still hold more than 33.81% (of the total 7.02b): Qatar Investment Authority: 230.2m shares, 3.28%, and 100m shares in CB. Norges Bank: 156.2m shares, 2.23%.
Pelham Capital Limited: 353.5m, 5.04%. BlackRock Group: 189m shares, 2.7%. Vanguard Group: 219m shares, 3.13%. Capital group, 196.8m. Barclays: held 91m shares. L&G: 143m share. Polygon: 109m shares 1.55%. ...
What do these tell us?

AAL bought 55m shares at around 5.5p with the help of Bank of America and Morgan Stanley. Not a significant number yet, however, it is interesting to see if they would grab more by themselves or with the help of others. What might be the purpose for this? Only to get them a chance to attend the General Meeting and vote ?"   wwguv

Cheers

At first they ... 

The Crazy Gang.

"... a better response may instead involve giving antisocial users a chance to redeem themselves.”

At least AA sound quite excitable about it ;-0

A professional punt ?

https://www.youtube.com/watch?v=0NQwiGTXoRU

Ahu.... Ahu..

Elvis has not left the building.

'Spins & Speculators"

""At the very least, investors should be offered an alternative Anglo paper offer for the stock, or combination of cash and shares.

But with some creativity they could do much more. They could design a new class of fractional Anglo-American shares for the Sirius investors, which could accrue value as the project is developed and income starts to flow, giving small investors an ongoing interest.

Or they could offer bonus/scrip shares, with no intrinsic value, which would offer a special dividend at some point in the future when the production dream has been realised.

There should be no confusion. Anglo-American is doing a good thing in saving a great project with 'green' aspirations.

But sprawling corporations with well-heeled advisers are not used to dealing with ordinary, aspirational citizens.

Cutifani should order the City slickers back to the drawing board.""

Thou must not 'Spiv'.

https://www.youtube.com/watch?v=-jKtY262cjs

Ohm ...

Mind, its been an exciting week... and it ain't quite over yet.

"Imagine if Sirius had released an RNS in December saying we've had an offer of financing, the share price shot up, lots of PIs increased their shareholdings, and then in March the company went bust because the financing couldn't be completed. Instead of getting 5.5p shareholders would get nothing. Imagine the abuse the BoD would get then for releasing that RNS when they knew it was unlikely to complete."

"He's a ruthless bastard when it comes to business and in my opinion he..."

Made a very difficult decision?

Is orf to have words with myself... and find the TBM II.

https://www.youtube.com/watch?v=zLmsZC45-m8

Darn it.