United Kingdom

MARKET REPORT: Suitors abandon rival bid for Sirius Minerals

Talks between Sirius Minerals and a group of financial investors to secure an alternative rescue deal have fallen through.

Sirius is in the process of being taken over by mining giant Anglo American in a £405m deal that was revealed in January.

But it had kept discussions going with an unnamed consortium, which had offered to lend it £521m to develop the next stage of its sprawling fertiliser mine under the North York Moors.

This would have kept it listed on the stock market – but would also have involved plenty of risks further down the line, because the company would have needed to raise money several more times.

Any hopes of this deal coming through have now been completely dashed. In a statement to the stock market, Sirius said the consortium walked away when it failed to secure support for the alternative deal from any major institutional investors.

The company has now warned that its shareholders must back Anglo's 5.5p per share offer, even though it will cement many people's losses, or risk going bust and losing everything.

Sirius amassed a huge retail shareholder following of 85,000 private investors as it tried to develop a mine for potash fertiliser.

But it ran into financial difficulty last year when it failed to raise much-needed cash, and has said repeatedly that it will run out of money by the end of March unless a white knight swoops in. Investors will vote on the Anglo deal in a do-or-die ballot on March 3.

Shares in Sirius, which for years was a FTSE 250 company before dropping out last year, fell below Anglo's offer price, closing down 2.3 per cent, or 0.1p, at 5.3p.

Engineering giant Rolls-Royce said it believes an existing nuclear site – Traws-fynydd in North Wales – could be the site of the UK's first small nuclear power station.

It is hoping to build a fleet of mini-nuclear reactors, which would be cheaper than setting up new versions of the huge traditional stations. Its shares closed up 1.5 per cent, or 9.8p, at 677.2p.

Elsewhere, the UK's competition regulator gave the green light to private pub group Stonegate to acquire rival EI (up 0.1 per cent, or 0.4p, to 284.8p), in a £1.27 billion deal.

Warehousing specialist Segro rose 1.5 per cent, or 13.6p, to 935p, after it said that online shopping has become so big in France and Germany that retailers will soon change their supply chains to include several delivery options.

Segro said that in the UK this has led to more demand for warehouses – and it now hopes the continent will deliver the same.

Profits in 2019 fell 18 per cent to £902m, on 18 per cent revenue growth, to £432.5m.

The FTSE 100 closed in the red, falling 0.58 per cent, or 42.9 points, to 7409.13, as fears about the coronavirus outbreak continued to weigh on globally exposed stock market indexes.

But the FTSE 250, which is affected more by domestic events, rose 0.54 per cent, or 116.18 points, to close at 21,790.08.

Mike Ashley's Frasers Group, the rebranded Sports Direct International, made headlines as it backed calls for the Government to slash business rates.

Retailers claim a revaluation that began in 2017 has made life more difficult for companies that are already battling the rise of online shopping.

Frasers has joined a campaign by the British Retail Consortium, involving 52 other High Street chains, calling for a 'wholesale review' of business taxes.

But Frasers shareholders, perhaps used to more colourful outbursts from Ashley, did not react, with its stock closing flat at 490p.

Over on AIM, law firm Knights Group climbed 5.6 per cent, or 25p, to 468p after it snapped up Nottingham-based law firm Fraser Brown solicitors for up to £8.2m.