(Bloomberg) — 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 1.7%, while Sirius rallied as much 46%, before trading 32% higher as of 9:11 a.m. in London.
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