UpdateBHP Billiton launches ‘hostile’ takeover bid for PotashCorp

18 August 2010 09:22  [Source: ICIS news]

SINGAPORE (ICIS)--Australian mining giant BHP Billiton announced on Wednesday its intention to proceed with a takeover bid of Potash Corporation of Saskatchewan Inc (PotashCorp), a day after the Canadian fertilizer group’s management rejected the offer.

BHP Billiton said it was offering $130/share (€101/share) for PotashCorp, which values the Canadian firm at roughly $40bn, to accelerate its entry into the fertilizer industry.

The all-cash offer was conditional upon the Australian firm getting more than 50% of the shares of PotashCorp, it said.

BHP Billiton said it plans to formally commence its offer on 20 August, with offer open for acceptances until 10 October 2010.

“We firmly believe that PotashCorp shareholders will find the certainty of a cash offer, at a premium of 32% to the 30-day trading period average, very attractive and we have therefore decided to make this offer directly to those shareholders,” said BHP Billiton chairman Jac Nasser in a statement.

PotashCorp is the world’s biggest potash producer, with operations representing 11% of the total production and 20% of global capacity, BHP Billiton said.

The company said it had arranged financing for the acquisition.

“The acquisition financing facility will preserve BHP Billiton’s financial flexibility. BHP Billiton remains committed to maintaining a solid ‘A’ credit rating and a progressive dividend policy,” the company said.

Moody’s Investors Service had said earlier on that BHP Billiton’s credit rating may be at risk of a downgrade if it proceeded with the offer for PotashCorp, but would its long-term rating would not fall below “A2”.

Moody’s currently has an “A1” rating for the Australian miner.

($1 = €0.78)

To discuss issues facing the chemical industry go to ICIS connect

By: Pearl Bantillo
+65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly