Sirius Minerals PLC (LON:SXX) chairman Russell Scrimshaw has warned that the company will fall into administration or liquidation within weeks, if a recommended takeover offer from Anglo American plc (LON:AAL) is snubbed by shareholders.
Anglo American this morning confirmed it had now made a formal offer to acquire Sirius, priced at 5.5p per share, and, the offer has been recommended by the Sirius board. The deal values Sirius at just over £400mln and it will now go to a shareholder vote at a general meeting.
It comes after Sirius’s project financing collapsed and the company launched a strategic review to explore its options.
Significantly, in today’s accompanying comments, Scrimshaw revealed that Sirius’s efforts to attract alternative financing and/or new partners for the project had failed.
“Going into the strategic review the Sirius Board's strong preference was a solution that allowed current shareholders to participate as fully as possible in the future development of the project,” Scrimshaw said.
“Following the strategic review process it is clear that no such options are currently available to us and in that context Anglo American's offer is the only feasible option.”
"We also recognise the returns that this offer would represent are not what either our shareholders or the Sirius Board had previously hoped for.”
He added: “We now face a stark choice. If the acquisition is not approved by shareholders and does not complete there is a high probability that the business could be placed into administration or liquidation within weeks thereafter.
“This outcome would most likely result in shareholders losing all of their investment, as well as put the future of the entire project, and its associated benefits for the local area and the UK, at risk.”
He concluded: “This is the context in which your board must assess the offer for your company.”