Sirius Update #5, 9 Feb 2020

CLARIFICATION

It has been brought to our attention by Sirius that our original MP Template Letter contained certain inaccuracies.

At the time of drafting the template, we had received the impression that Sirius had been negotiating the takeover with Anglo American for a year and a half, including the period covering the 15p open offer and placing. The company confirms, and we accept, that this was not the case.

We would also like to clarify that our reference to a protracted marketing campaign by the company was not intended to imply any breach by Sirius of FCA rules in relation to any open offers.

If you have written to your MP on the basis of the original Template Letter you will need to correct it in order to ensure you do not unintentionally libel Sirius and/or its directors. We would suggest that you do so by using the text of this notice.

Thank you, and apologies.

Update re SSSG members

As at 3:30pm, Friday 7 Feb we now have 819 individuals in the SSSG.

This comprises:

74 Non-members

150 Full members

595 Associate members

490 of these have declared their shareholding, this totals: 143,445,818 shares (of this, one person holds 6M, 8 hold between 2M and 3.5M and 23 hold between 1M and 2M).

We still have a slight backlog, so the actual numbers are higher than this. The scale of this project is unprecedented for ShareSoc and many people are working very hard to make SSSG work as best as possible.

The 150 Full members have paid the £45 ShareSoc Full Membership fee and are able to access the SSSG Forum https://www.sharesoc.org/forums/forum/sharesoc-sirius-shareholders-group-forum/

This Forum now has over 40 pages of detailed comments and analysis. It is proving a very valuable medium for Sirius Shareholders to exchange views and learn more about what has happened and what might happen next.

The others receive regular updates on the campaign. This update is the fifth we have emailed out to SSSG members.

Etiquette

Please be civil in your contributions to our Forum and to other bulletin boards. Remember to take a few extra seconds, hours or days before you hit the post button. Remember it is illegal to make threats, or libel someone – anyone who does so might end up in jail.

Anglo Progress

The SSSG team is meeting Anglo executives on Wed 12 Feb.

Press Coverage

Our good links with the press continue and two notable stories have been:

Teeside Gazette https://www.sharesoc.org/category/media-mention/, and

Daily Mail https://www.thisismoney.co.uk/money/markets/article-7979371/Sirius-Minerals-shareholders-decide-future-make-break-vote-March-3.html

Update on MPs

The MPs letter writing campaign demanding action has started to have an effect. If you have not written yet, please do so now. Please include your personal details as this will help to force your MP to listen and feel free to add your personal concerns: then email your MP. Google “find my MP’s email” to get his/her address or use this link https://www.parliament.uk/get-involved/contact-your-mp/

Timetable

Key date – 3 March for GM and Court Agreement. All shareholders can attend and ask questions. Book the date in your diary now. See below for other key dates.

Scheme of Arrangement and Voting

Crucially, Sirius have now published their official circular setting out the scheme of arrangement and the process for approving it. All share holders should study this document carefully. It is available on Sirius’s website, here: https://siriusminerals.com/investors/firm-offer-from-anglo-american-plc/. To download and read the circular, accept the disclaimer and scroll down the page that then appears to the “Offer Documentation” section. The circular is labelled “Scheme Document”.

Meetings

There are two essential prerequisites for a scheme of arrangement to come into effect:

A general meeting of shareholders, which votes on a special resolution to approve the scheme. 75% of votes must be favour for the scheme to be approved.
Approval by the high court

As part of the high court approval process a “Court Meeting” of shareholders is required. This has also been scheduled for 3rd March at 11am, immediately before the general meeting. Shareholders also vote in favour of or against the Scheme at the court meeting. There are two key factors that the high court will consider before approving the scheme:

Firstly, a 75% majority of shares voting at the Court Meeting is required. Secondly, however, the court will consider the number of shareholders voting for or against. A simple majority of shareholders who vote is also required for the scheme to be approved. The purpose of this is to protect minority shareholders as, once approved, a scheme is binding upon all shareholders. The requirement for a majority of shareholders to approve prevents a small number of large shareholders forcing a scheme on a large number of small shareholders. The high court may also look askance if only a small proportion of shareholders vote, so if Sirius wants the scheme to be approved it will need a good number of shareholders to turn out.

Nominee Accounts

Unfortunately, this protection is far less effective, in practice, than it should be. This is because of the current definition of “shareholder” in law. Most individual shareholders hold their shares through nominee accounts and it is the nominee that is considered to be the shareholder (or, more accurately “member of the company”). So, even though a nominee may represent thousands of individual shareholders, they will only count as one shareholder for these purposes. Unless you have a share certificate for your shares, or hold them in a personal CREST account, your shares will be held by your broker or platform’s nominee. Unfortunately personal CREST accounts are rare and expensive nowadays. All shares in ISAs or SIPPs must be held in a nominee account.

If, as is likely, your shares are held by a nominee, this has further ramifications.

How to Attend and/or Vote if Your Shares are in a Nominee Account

Firstly, you are not automatically entitled to attend the court and general meetings and vote. If you wish to attend those meetings in person, you MUST request a “letter of representation” from your broker, which appoints you as their representative in respect of the shares that you hold and entitles you to attend, speak and vote your shares. Make sure you request this well in advance of the meetings, to be sure of receiving it in time (your broker should also inform Sirius’s registrar of your appointment). We recommend that you request this ASAP.

Even if you do not intend to attend the meetings in person, you can still vote but, if your shares are held in a nominee account, your broker will have to cast the votes on your behalf. If you do not know how to request this, you should contact your broker and ask them what the procedure is for voting. Often they will require you to send them a secure message though their website, but some offer more direct electronic voting.

See https://www.sharesoc.org/investor-academy/advanced-topics/nominee-accounts/ for further details about nominee accounts.

Voting Deadlines

If you are not intending to attend in person, the deadline for receiving proxy votes is 28th February (so they need to have been sent sufficiently before that date as to be sure of arriving in time). They must be sent to Link Asset Services, as stated in note 6 on p92 of the circular. If your shares are held in a nominee, your broker will generally set a deadline for submitting your voting instructions well ahead of Sirius’s deadline (typically one week before), so check the deadline for submitting vote instructions with your broker and make sure that you submit your instructions in time.

Nevertheless, this still leaves time for you to consider carefully how to vote. The SSSG expects to publish further information ahead of the deadline, and possible other offers have been mooted in the press, so it would be advisable to wait a little for such information to emerge before deciding.

How this might play out is still unclear. We will do our best to keep you informed.

Sirius advises us that “a fairly deep dive campaign is planned to communicate with underlying beneficial holders in our situation, ” and said they are happy to discuss communications. [“beneficial holders” include those whose shares are held in nominee accounts].

Full Members of ShareSoc who require assistance or support with voting or meeting attendance, can contact our office.

Go here for further information about the SSSG and to register.

Cliff Weight, ShareSoc Director and SSSG Team member/Mark Bentley, ShareSoc Director

Post Date: February 10, 2020

Group description:	Our group is interested in sustainable investing and our goal is to identify and evaluate businesses that will thrive through innovation and their transition to a ‘One Planet Economy’. By leveraging the skills of group members, we aim to deeply understand these businesses, particularly focusing on how they develop long-term valuable benefits for their customers. Each year, we plan to evaluate around seven businesses to identify opportunities where our valuation exceeds the market price. A successful outcome is defined as achieving a compound annual growth rate (CAGR), including dividends, of 10% over a decade.
Meeting Type/Venue:	Meetings are in-person in a pub near to Waterloo station in London.
Meeting Frequency/Timing:	Meetings are bi-monthly on a Monday from 10:45am to 4:30pm. Members are expected to also pay for their own lunch which secures the group free use of a private room in the pub. The cost is expected to be £35-40 per person, per meeting, in addition to your SIGnet membership fee.

Group description:	SIGnet Taunton is a new group with around 10 keen members at present, with a range of investment styles and experience. We welcome new members.
Meeting Type/Venue:	In person meetings at a golf club near to the centre of Taunton.
Meeting Frequency/Timing:	We meet on the first Monday of every month at a golf club near to the centre of Taunton, 11am until 3pm with a lunch break.

Group description:	An online group for those who are new to investing, or have only been investing for a few years. Including topics such as: – What is a share or a bond, why and how to buy them. – Comparing funds, unit trusts, Investment trusts and exchange traded funds. – Portfolio management and diversification. – ISAs, pensions, SIPPS and how to save tax. – How terms such as PE ratio and dividend yield are used to value a share. – How to use technical analysis or charting.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Monday of the month at 7:00pm.

Group description:	An online group for those who already have some experience in investing. Covering topics such as finding companies to invest in, financial statements and ratios, valuation / margin of safety, analysis of companies and investment trusts and exchange traded funds.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Wednesday of the month at 7:00pm.

Group description:	The Equity Income Group welcomes investors of all levels of experience, from beginners to advanced. The focus of meetings is on dividend paying Investment Trusts, though there is also discussion around individual shares.
Meeting Type/Venue:	Meetings are held online.
Meeting Frequency/Timing:	Meetings are held every 6 weeks on a weekday between 7 and 8:30pm.

Group description:	All levels of experience welcome. A typical meeting agenda includes: – Macro Environment – Trades: Members review existing positions and identify securities with promising TA entry patterns or setups and with suitable risk/reward. Any security, long, short, futures, options may be considered. The convener takes actual positions in trades and maintains his own detailed ledger, accurately measuring performance of individual securities and cumulative activity. Members are notified by e-mail prior to the entries or exits that are decided upon. Following each meeting an updated copy of the ledger is circulated together with the next meeting agenda. Members may wish to maintain similar ledgers of their own but there is no obligation to do so. – Technical Analysis: Techniques and systems used in trades. Members can request discussion of particular aspects of TA.
Meeting Type/Venue:	Online via Zoom
Meeting Frequency/Timing:	The first Tuesday of every month from 7 to 9pm

Group description:	Group focused on active investing, primarily in small / medium cap UK equities.
Meeting Type/Venue:	Regular Zoom meetings interspersed with occasional face to face meetings and social activities in the North West.
Meeting Frequency/Timing:	Monthly on Saturdays at 10am.

Group description:	Our group covers a wide spectrum of mainly stock market investing and trading from equities – which include shares, ETF’s Investment and Unit Trusts. We normally rotate the meeting chairperson (responsible for creating, with member’s help, suitable agendas) and a meeting presenter (members take it in turns to provide a 15 to 45 minute presentation on a subject of their choice). Various investing topics of interest are regularly discussed such as software, brokers, investing categories and markets and any related topics of interest.
Meeting Type/Venue:	Meetings will be returning to in-person in a private room at a West London golf club, close to an underground station. In the meantime monthly video calls and an in-between meeting email group will continue.
Meeting Frequency/Timing:	In-person meetings will be held on the second Wednesday of each month in the afternoons, following a golf club one course lunch.