Millionaire hedge fund tycoon Crispin Odey today turned Robin Hood for the 85,000 small investors in Sirius Minerals as he launched an aggressive attack on Anglo American’s takeover bid.
Sirius is building a huge fertiliser mine in a deprived area of the North Yorkshire Moors and many locals rushed to invest their savings in its shares.
However, the high-risk project failed to get enough financial backing and the shares crashed from a peak of 44p — valuing it at £3 billion — to just 3p. Giant miner Anglo American swooped in with a bid for just 5.5p, valuing the company at just £360 million.
Today, Odey’s fund slammed the Sirius board for accepting the offer, which it described as a “mockery”.
His Mayfair fund Odey Asset Management has built up a 1.29% stake in Sirius over the past two weeks and said it would vote against it. Odey wants at least 7p a share, a price which is likely to deliver good returns on the fund’s investment.
In an open letter to Sirius boss Chris Fraser and Anglo chief Mark Cutifani, Odey said Sirius’s most recent accounts in September show an equity value of £893.1 million, 120% above Anglo’s offer.
Odey’s fund manager Henry Steel said: “Odey struggles to see how the board of Sirius, including the CFO, can recommend the offer to shareholders as being ‘fair’ only four months after these accounts were published.”
He said Anglo’s bid fell way short of the valuation put on the mine by an independent report into the mine carried out by mining consultancy RPA: “The offer seems to make a mockery of both internal and external audits at Sirius.”
Odey will vote against any offer that is not designated by Anglo as “final”. Odey believes Anglo has declined to call its offer final because it thinks a higher bidder may come in - proving that even Anglo recognises its bid is low.
The move by Odey comes as shareholders prepare to vote on the deal on March 3. Investors with shares representing 75% of the company need to vote in favour for it to go ahead.
Sirius boss Fraser yesterday told shareholders the 5.5p per share offer from Anglo American was the only viable way forward or it faces administration. Many shareholders want to see another offer on the table.
It is not known how the company’s biggest shareholder, Jupiter, will vote as the money manager has stated it wants to see another bid put together so Sirius can stay on the stock market.
Sirius shares were up 1% at 5.1p.