04 September 2009 17:42 [Source: ICIS news]
HOUSTON (ICIS news)--Shares of Canada’s Potash Corp of Saskatchewan traded on Friday flat to slightly up on the New York Stock Exchange, amid speculation that the company could be pondering a takeover of troubled German fertilizer company K+S.
Meanwhile, Moody’s Investors Services downgraded its outlook on potash producer K+S to negative from stable, the ratings agency said on Friday.
The change in the outlook to negative was prompted by a rapid deterioration of the company's operating performance and cash-flow generation during the first six months of the fiscal year, Moody’s said.
Moody’s said K+S had faced difficult market conditions with a significant slump in volumes, including a drop of 54% year over year for its potash and magnesium products division.
Despite the downgrade, shares of K+S on European exchanges were up as much as 6% on Friday, fuelled by speculation of a possible takeover by Potash Corp of Saskatchewan (PotashCorp).
“PotashCorp does not comment on market rumours,” senior vice president Tom Pasztor.
Talk also circulated this week that other potash companies could be involved in merger activity.
Market watchers speculated that mining giant BHP Billiton was possibly interested in expanding into the potash fertilizer space and looking at PotashCorp as a target.
Brazilian miner and fertilizer producer Vale, which has potash assets in Saskatchewan and was said to have prepared a takeover offer of Mosaic, earlier this week denied interest in such a move.
Vale said it would continue developing its existing fertilizer projects in Brazil, Argentina, Mozambique and Canada.To discuss issues facing the chemical industry go to ICIS connect
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