Potash keen on other bidders
By Eric Onstad and Sonali Paul |
August 24, 2010, Tuesday
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Print Edition
Print Edition
CANADA'S Potash Corp is seeking talks with possible counter-bidders as it fights off an unwanted US$39 billion takeover offer from BHP Billiton.
Potash, the world's largest fertilizer supplier, said it expected an alternative to emerge after BHP formally launched its US$130 per share hostile bid last week.
"Potash Corp has been approached by, and has initiated contact with, a number of third parties who have expressed an interest in considering alternative transactions," the company said in a statement yesterday.
"Discussions are being pursued with several of these third parties in order to generate value enhancing alternatives."
The group was working on a range of strategic alternatives which may boost shareholder value, it added.
Potash urged its shareholders not to tender their shares to the BHP offer, which has an October 19 deadline for what may be the world's biggest takeover this year.
Potash had already branded the bid as "grossly inadequate" and undervaluing the firm but pledged to look at BHP's official offer documents before making a recommendation to its shareholders.
Potash did not say which companies had approached it, but media reports have mentioned China's Sinochem Group, Brazil's Vale and Chinese private equity fund Hopu Investment Management.
Citing a person with knowledge of the matter, Bloomberg said that Sinochem and Vale had made inquiries with the board of Potash late last week about the possibility of talks.
Other companies had also contacted the board, but the approaches may not lead to talks, the person added.
The Wall Street Journal cited a person familiar with the situation saying a consortium led by Hopu was studying the feasibility of a bid. Other members were investors from Canada, the United States and Asia, but Sinochem was not a member.
Officials with Hopu and Vale contacted by Reuters declined to comment.
A Sinochem official did not have any knowledge of the reported contact with Potash Corp. "I haven't heard that we have contacted them." Li Qiang, head of the company's president's office, told Reuters.
"We think it's credible that Sinochem is interested but view them as a relatively minor threat to BHP as they won't be able to go for whole thing," said analyst Michael Rawlinson at Liberum Capital in London.
Potash, the world's largest fertilizer supplier, said it expected an alternative to emerge after BHP formally launched its US$130 per share hostile bid last week.
"Potash Corp has been approached by, and has initiated contact with, a number of third parties who have expressed an interest in considering alternative transactions," the company said in a statement yesterday.
"Discussions are being pursued with several of these third parties in order to generate value enhancing alternatives."
The group was working on a range of strategic alternatives which may boost shareholder value, it added.
Potash urged its shareholders not to tender their shares to the BHP offer, which has an October 19 deadline for what may be the world's biggest takeover this year.
Potash had already branded the bid as "grossly inadequate" and undervaluing the firm but pledged to look at BHP's official offer documents before making a recommendation to its shareholders.
Potash did not say which companies had approached it, but media reports have mentioned China's Sinochem Group, Brazil's Vale and Chinese private equity fund Hopu Investment Management.
Citing a person with knowledge of the matter, Bloomberg said that Sinochem and Vale had made inquiries with the board of Potash late last week about the possibility of talks.
Other companies had also contacted the board, but the approaches may not lead to talks, the person added.
The Wall Street Journal cited a person familiar with the situation saying a consortium led by Hopu was studying the feasibility of a bid. Other members were investors from Canada, the United States and Asia, but Sinochem was not a member.
Officials with Hopu and Vale contacted by Reuters declined to comment.
A Sinochem official did not have any knowledge of the reported contact with Potash Corp. "I haven't heard that we have contacted them." Li Qiang, head of the company's president's office, told Reuters.
"We think it's credible that Sinochem is interested but view them as a relatively minor threat to BHP as they won't be able to go for whole thing," said analyst Michael Rawlinson at Liberum Capital in London.
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