Potash Corp. of Saskatchewan’s
(POT) board voted unanimously to reject BHP Billiton’s (BHP) hostile $38.5
billion takeover offer because it doesn’t reflect the strong growth Potash
believes it is poised to enjoy.
The Canadian company, the world’s
largest potash miner, says its share price had been depressed by the global
recession but should rise as growth in agriculture boosts demand for potash,
which provides potassium, a key ingredient of fertilizer.
“BHP Billiton is opportunistically
attempting to transfer the upside value in Potash Corp. to its own shareholders
at the expense of Potash Corp. shareholders,” the company said.
The potash market is reaching an
“inflection point” characterized by increased global demand for the mineral
and rising prices that will boost the company’s profits, it said.
BHP Billiton, the world’s biggest
mining company, launched the hostile $130-a-share takeover last week after
Potash directors rejected its efforts to get an agreement for a deal from the
Some analysts say Potash may be
trying to flush out a rival bidder, mentioning Anglo-Australian miner Rio Tinto
and Chinese agribusiness SinoChem as potential suitors.
Rio Tinto’s CEO Tom Albanese last
week declined to comment.
Li Qiang, director of the general
office of SinoChem, said the company is following the deal but had no comment
The “fertilizer business is a
major business of our company, so we will surely pay great attention to opportunities
that suit our characteristics in the global market.”