UK-based hedge fund Odey Asset Management has called on Anglo American to lift its bid for Sirius Minerals, the troubled fertiliser development firm in which it has a 1.29% stake.
In a report by the Financial Times, Odey was quoted as saying in a letter that Anglo’s offer for Sirius Minerals undervalued the company. Odey said it would vote against the bid whilst it remained a non-final offer.
It wants Anglo to increase its bid to seven pence per share compared to its current 5.5p offer – which equates to £405m in cash. That offer was recommended by Sirius Minerals’ board in January. Odey added that Anglo’s offer was not final because the mining group was concerned it may have to increase it as a counter bid to a rival offer.
“If Anglo wish to retain the option to counter bid, Odey accepts that rationality, and hence also commits today to vote in favour of any bid at 7p or above,” said Odey in a statement in a letter. The deal needs the approval of 75% of shareholders at a special meeting on March 3 to go ahead, said the Financial Times.
Sirius has been criticised for recommending Anglo’s offer by its retail shareholders, some of whom have ploughed their life savings into the company and are facing heavy losses if the takeover goes through, said the newspaper.
“Odey notes that the very low voter turnout at Sirius annual general meetings, at the level of 35%, gives greatly magnified power to Sirius shareholders who do vote,” the hedge fund said in its letter.
Sirius is developing a polyhalite project in Yorkshire – called Woodside – which contains minerals considered 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,” said Anglo American.
