|Bid||5.40 x 0|
|Ask||5.42 x 0|
|Day's Range||5.36 - 5.45|
|52 Week Range||2.10 - 8,389.00|
|Beta (5Y Monthly)||0.85|
|PE Ratio (TTM)||6.75|
|Earnings Date||Aug 17, 2018 - Aug 20, 2018|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||45.00|
(Bloomberg Opinion) -- Anglo American Plc is dabbling in creative M&A. Buying an English fertilizer project for just over $500 million, excluding debt, is more than manageable for a $35 billion mining giant that generated $1.3 billion in free cash flow in the first half of last year. It’s also a gamble on an unproven niche market that speaks to the paucity of large-scale acquisition options for cashed-up diggers.Anglo said on Wednesday it may bid for London-listed Sirius Minerals Plc, owner of a giant potash project under the North York Moors national park. The mine’s future has been in question since a funding plan collapsed last year, after Sirius was forced to pull a $500 million junk bond sale, making it impossible to unlock a $2.5 billion credit facility from JPMorgan Chase & Co.That makes this an opportunistic move by Chief Executive Officer Mark Cutifani. Anglo is offering 5.5 pence per share for a stock that traded at four times that less than a year ago. It’s an affordable option — Anglo can easily support both the cost of the initial deal and a development spend estimated at $300 million a year for the next two years.It’s a laudable effort at diversification too, away from South Africa, into a counter-cyclical commodity and a space the miner hasn’t been in since selling its niobium and phosphates business in Brazil in 2016. It’s also purchasing at a relatively low point for fertilizer ingredients — notable for an industry that in the past burned billions buying at the top.None of this means Anglo should press ahead with a firm offer.Anglo shareholders still bear bruises from its disastrous, peak-of-the-market Minas Rio deal – a Brazilian iron-ore project that was plagued by years of cost overruns and delays, and ultimately contributed to the departure of Cutifani’s predecessor. The $5 billion Quellaveco copper mine in Peru, meanwhile, which was supposed to prove Anglo’s ability to build from scratch, is still two years from production.Anglo argues the Sirius development is far more advanced than Minas Rio was. That’s true. But it will still require some $3 billion, by Sirius estimates, and a 37-kilometer (23-mile) tunnel under a national park, for a conveyor belt to take rock to port. A challenge, even with permits in hand.Investors should be far more worried about Anglo bosses’ willingness to bet on a project where demand for the end product — an alternative to traditional potassium-bearing minerals called polyhalite — is unproven, and prices are unclear. The selling point is that it combines several key nutrients along with potassium — magnesium, sulfur and calcium — and is low-chloride too, which matters for some crops. It’s unclear how those extras are valued, though.Only one company, Israel Chemicals Ltd., currently produces polyhalite, from one mine. Price estimates range from $100 to $200 per metric ton, making the economics difficult to calculate, including Sirius’s promised 50%-plus Ebitda margin.Polyhalite accounts for a tiny sliver of the wider potash market, even among low-chloride alternatives, largely because it contains far less potassium.That means the capacity of the Yorkshire mine dwarfs current demand. The polyhalite market amounts to less than one million tons a year, but the Yorkshire mine could produce 13 million tons. That’s a mighty step up, even accounting for the purchase agreements Sirius has already signed. Success will require building substantial new demand and clawing market share away from potash giants like Nutrien Ltd. With plentiful supply of standard potash in the medium term, that may be a challenge.There is some element of reassurance here. Even if it bids, Anglo won’t be committing to develop the mine, making this an option of sorts.That’s small consolation for investors, though, who will fret that cash-rich miners looking for growth — and wary of overspending on coveted metals like copper — will begin to experiment. Expect mixed results. To contact the author of this story: Clara Ferreira Marques at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
One Royal demerger to start: It is a deal that will not go before the UK Takeover Panel, even though communications from the parties involved have all the trappings of a hostile battle. Prince Harry and Meghan Markle announced their effective resignation from their royal public duties and declared their intent to be “financially independent”. The response from Buckingham Palace, below, reads like communiqués straight out of the M&A business.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Anglo American Plc has moved to buy a giant U.K. potash mine that was running out of money, adding another major growth project for the century-old miner.The deal for Sirius Minerals Plc is likely to secure 1,200 jobs and save the development of a mine in one of the U.K.’s most economically deprived areas. It’s also a further sign that Anglo is committed to growing its business -- adding a second major project to its Peruvian copper-mine development -- at a time when most rivals are reluctant to expand.Anglo said it’s in advanced talks with Sirius about a possible 5.5 pence-a-share offer that values the company at about $508 million. While that’s a premium of 34% on Sirius’s closing share price on Jan. 7, the company was worth more than $2.3 billion 18 months ago, before its funding plans dried up.Sirius’s plans were thrown into doubt last year after it suspended a bond sale, required to unlock a $2.5 billion credit facility from JPMorgan Chase & Co. The company was forced in November to scale back its plans, but had also said it was talking with potential investors or buyers.Anglo said it will build the mine for the same $3.1 billion that Sirius earmarked in its updated plan. Anglo shares fell 0.5%, while Sirius rallied as much 46%, before trading 35% higher as of 4:04 p.m. in London.Sirius debt owners were the big winners, with the company’s $106.6 million of convertible bonds tripling. An offer to acquire all or a majority of the company’s shares triggers a so-called change of control clause in the bonds that allows creditors to redeem the debt.Hard TimesThe deal will be a huge relief for an economically depressed region. Overlooking the seaside town of Whitby, the setting for part of Bram Stoker’s “Dracula,” Sirius has already started work on two giant shafts and a 37-kilometer (23-mile) tunnel to transport the potash to the port at Teesside. Once a key steelmaking region, it’s fallen on hard times as plants closed. Some locals are set to benefit from mineral rights, while others have bought shares in the company.Sirius, backed by Australian billionaire Gina Rinehart, plans to extract polyhalite from a mine more than a mile deep. One of the shafts is already more than 100 meters deep, with 1,200 staff and contractors on site.So far, the company has spent about $1.5 billion, including building a plant to make concrete supports for the tunnel. Once in production, Sirius planned to employ about 1,000 people and export $2.5 billion in potash each year.For Anglo it adds a major potash resource as the company looks to retreat from thermal coal.“We are unashamedly transitioning our portfolio to later cycle products that we believe the world will need as it goes forward,” Chief Financial Officer Stephen Pearce said on a call with reporters.Strategic MoveThe miner has been cutting thermal coal production in recent years, with output falling from as much as 80 million tons to less than 30 million tons. In recent months, it has been hinting that it will look to move away from the dirtiest fuel altogether.It also further separates Anglo from its larger diversified rivals. The company is already in the process of building a $5 billion copper mine in Peru, albeit with a Japanese partner to cut the cost and risk. While the company has also been returning money to shareholders, it’s been more measured than Rio Tinto Group and BHP Group.“We fundamentally believe part of our responsibility is to keep an eye on growth over all the aspects of different time frames,” said Pearce. He said the company doesn’t expect the deal to change its dividend policy.It also marks a return for Anglo both to fertilizer and the U.K. The company sold its phosphates business in Brazil in 2016 as it looked to weather a crisis. It exited the U.K. before that, when it sold its Tarmac business.Sirius said on Wednesday that, subject to the successful outcome of talks, it has indicated to Anglo that it expects to recommend a firm offer at the price set out in the proposal.Anglo said it reserves the right to reduce any offer by the amount of any dividend or other distribution by Sirius. Under U.K. takeover rules, the company has until Feb. 5 to announced a firm intention to make an offer.Bank of America Corp. and Centerview Partners U.K. LLP are the joint financial advisers to Anglo, while JPMorgan is advising Sirius.(Updates with bonds in sixth paragraph)To contact the reporter on this story: Thomas Biesheuvel in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Lynn Thomasson at email@example.com, Dylan Griffiths, Nicholas LarkinFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
Anglo American stock slid on Wednesday as the mining giant said it was considering a £386 million bid to buy struggling fertilizer miner Sirius Minerals.
in Wednesday’s FT which is well worth a read (not least because it’s co-written by our departing editor, Lionel Barber). It turns out his stint as Bank of England governor didn’t go exactly as Mr Carney expected. In that spirit of openness, Mr Carney warns central banks are running out of ways to fight against future recessions.
Mark Cutifani would be an unlikely addition to a pantheon of Yorkshire legends that includes broadcaster Michael Parkinson and controversial cricketer Geoff Boycott. The big miner may buy the tiny one, whose overambitious scheme to extract polyhalite, a fertiliser rival of potash, ran into predictable trouble. Hype from Sirius persuaded thousands of small punters to buy its shares, before it started running out of cash.
Anglo American has made a takeover bid for Sirius Minerals, throwing a potential lifeline to the UK-listed group battling to build a giant potash mine below a national park on the North York Moors. The FTSE 100 company said it was in advanced discussions with Sirius over a 5.5p a share cash offer that would value the company at almost £386m and save it from collapse. In November, Sirius said it was seeking a backer to help fund a revised development plan.
Every investor in Sirius Minerals Plc (LON:SXX) should be aware of the most powerful shareholder groups. Institutions...