ABP is blocking the demerger of Australian miner Jupiter Mines’ iron ore branch, as the €493bn Dutch civil service scheme said it is not interested in owning a share in the new company Juno Minerals.
In an unusual move, Jupiter Mines bluntly accused ABP of blocking the demerger in a statement on its website. The company said ABP does “not intend to meet the regulatory requirements of Australia’s Foreign Investment Review Board (FIRB)”.
ABP’s refusal to do so is effectively blocking the demerger from being completed, according to Jupiter, “despite the overwhelming support for the demerger of Juno Minerals Limited” at its annual general meeting of 19 February 2021. ABP is Jupiter’s largest shareholder, owning 15% of the firm’s shares, with a total value of €40m.
Jupiter’s CEO, Priyank Thapliyal, said “the IPO […] in this robust iron ore price market was the optimal structure to release substantial value for Jupiter shareholders. Needless to say, this has been usurped for all the shareholders by the decision of one shareholder, ABP.”
ABP told trade publication Pensioen Pro that it does not oppose the demerger as such, but that ABP does not support Jupiter’s current proposal as this involves ABP automatically becoming a shareholder in Juno Minerals.
The scheme believes Juno would be too small a company for it to invest in, and ABP is worried the stock may not be sufficiently liquid. It also believes investing in the new firm may be “too risky”.
ABP also noted it was not the only shareholder to vote against Jupiter’s demerger proposal, as in total 22% of shareholders did so. The scheme declined to discuss the FIRB demands that were mentioned by Jupiter, but an spokesperson for ABP’s asset manager APG said ABP would have had to ask the FIRB for permission to invest in the new firm Juno.
As APG has not asked for this permission, it is legally not permitted to own Juno shares, it explained.
APG said it understands its behaviour may frustrate other investors in Jupiter, but that it is obliged to act only in the interest of ABP members.
“And that’s what we’ve been doing,” APG said, adding that it is open for dialogue with Jupiter about the demerger options.
Besides iron ore, Jupiter also produces manganese, a commodity that’s used as input for steel production. Jupiter said it is “assessing its future options and will update the markets in due course.”