Hostile Bid for PotashCorp
BHP Billiton announced USD 40 billion Hostile Bid for PotashCorp
18.08.2010 | Deskman: Marcel Dröttboom
London, UK – BHP Billiton has announced to make an all-cash offer to acquire all of the issued and outstanding common shares of PotashCorp valued at USD 40 billion. This attempt of the hostile for PotashCorp follows an proposal by BHP Billiton to combine both companies, that was rejected by PotashCorp on August 17, 2010.
On August 18, 2010, BHP Billiton announced its intention to make an all-cash offer to acquire all of the issued and outstanding common shares of Potash Corporation of Saskatchewan (PotashCorp), at a price of USD 130 in cash per PotashCorp common share. The offer values the total equity of PotashCorp at approximately USD 40 billion on a fully-diluted basis. According to BHP Billiton, the offer represents a premium of 20 per cent to the closing price of PotashCorp’s shares on the NYSE on 11 August 2010, the day prior to BHP Billiton’s first approach to PotashCorp. The company also said that the offer would be fully funded and provide PotashCorp shareholders with immediate liquidity and certainty of value regarding the company’s growth potential in the face of volatile equity markets.
On August 12, 2010, BHP Billiton Chief Executive Officer Marius Kloppers made a proposal to PotashCorp’s President and Chief Executive Officer, Mr William J. Doyle, to combine the two companies in which PotashCorp shareholders would receive USD 130 in cash per PotashCorp common share. On August 17, 2010, PotashCorp officially announced that its Board of Directors has unanimously rejected the unsolicited proposal from BHP Billiton. According to this release, PotashCorp’s Board of Directors had reviewed the proposal and concluded that it would be grossly inadequate. „The PotashCorp Board of Directors unanimously believes that the BHP Billiton proposal substantially undervalues PotashCorp and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects,“ said PotashCorp Chairman Dallas J. Howe.
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