BHP Bilton Bids for Potash
|Marius Kloppers, the boss of BHP Billiton. Photograph: Mick Tsikas/Reuters|
BHP Billiton on Friday said it had begun a roughly $40 billion tender offer for Potash shares, officially going hostile in its pursuit of the Canadian fertilizer giant.
BHP said it would pay $130 a share in cash, the same price that Potash’s board has already rejected as insufficient. The offer is set to expire Oct. 19.
American shares in Potash closed on Thursday at $148.84.
In a statement, Potash said that it is reviewing the offer and advised shareholders to take no action at this point.
Potash’s chief executive, previously told DealBook that he and the company’s board aren’t opposed to a sale, but have derided BHP’s offer as undervalued. The company is exploring ways to drum up potential rival bidders, people briefed on the matter said. They added that a universe of other interested parties beyond Rio Tinto and Vale may emerge, including agricultural companies and players in China.
BHP has said that its offer is fairly priced, and people close to the company emphasize the strength of the mining giant’s balance sheet and its bank financing. [N. Y. Times]
BHP Billiton (ASX:BHP/LSE:BLT/NYSE:BBL/JSE:BIL) today announced that an indirect wholly-owned subsidiary of BHP Billiton Plc, BHP Billiton Development 2 (Canada) Limited (the “Offeror”), has commenced the previously announced offer (the “Offer”) to acquire all of the issued and outstanding common shares of Potash Corporation of Saskatchewan Inc. (“PotashCorp”) (NYSE:POT/TSX:POT), at a price of US$130 in cash per PotashCorp common share (the “Offer”). The Offer values the total equity of PotashCorp at approximately US$40 billion on a fully-diluted basis.
The Offer represents an attractive 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. It is also a premium of 32 per cent and 33 per cent to the volume weighted average trading prices of PotashCorp’s shares on the NYSE for the 30-trading day and the 60-trading day periods ended on the same date, respectively.
The Offer is open for acceptance until 11:59 p.m. (Eastern time) on 19 October 2010, or such later date or dates as may be fixed by the Offeror unless the Offer is withdrawn.
The Offer is being made by BHP Billiton Development 2 (Canada) Limited (the “Offeror”), an indirect wholly-owned subsidiary of BHP Billiton Plc. This announcement is for information purposes only and does not constitute or form part of any offer to purchase or any solicitation of any offer to sell PotashCorp’s common shares. The Offer (as the same may be varied or extended in accordance with applicable law) is being made exclusively by means of, and subject to the terms and conditions set out in, the offer and the circular, the letter of transmittal, the notice of guaranteed delivery and other related tender offer materials (the “Offer Materials”).
In connection with the Offer, the Offeror, BHP Billiton Limited and BHP Billiton Plc will file with the Canadian securities regulatory authorities the Offer Materials and will file with the U.S. Securities and Exchange Commission (the “SEC”) a Tender Offer Statement on Schedule TO (the “Schedule TO”), including the Offer Materials.
THE OFFER MATERIALS AND THE SCHEDULE TO, AS THEY MAY BE AMENDED FROM TIME TO TIME, WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER, THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN A FREE COPY OF THE OFFER MATERIALS AND OTHER DOCUMENTS FILED BY THE OFFEROR, BHP BILLITON LIMITED AND BHP BILLITON PLC WITH THE SEC AT THE WEBSITE MAINTAINED BY THE SEC AT WWW.SEC.GOV AND WITH THE CANADIAN SECURITIES REGULATORY AUTHORITIES AT WWW.SEDAR.COM. MATERIALS FILED WITH THE SEC OR THE CANADIAN SECURITIES REGULATORY AUTHORITIES WILL BE ABLE TO BE OBTAINED WITHOUT CHARGE AT BHP BILLITON’S WEBSITE, WWW.BHPBILLITON.COM, OR BY CONTACTING THE INFORMATION AGENTS FOR THE OFFER, MACKENZIE PARTNERS, INC. AND KINGSDALE SHAREHOLDER SERVICES INC., BY PHONE AT 1-800-322-2885 and 1-866-851-3215 RESPECTIVELY, OR BY EMAIL AT firstname.lastname@example.org AND email@example.com, RESPECTIVELY.
While the Offer is being made to all holders of PotashCorp common shares, the Offer is not being made or directed to, nor will deposits of PotashCorp common shares be accepted from or on behalf of, holders of PotashCorp common shares in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. However, the Offeror may, in its sole discretion, take such action as it may deem necessary to extend the Offer in any such jurisdiction.
This announcement contains information, including information relating to PotashCorp, that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of such information.
This announcement may contain, in addition to historical information, certain forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “expected”, “scheduled”, “estimates”, “intends”, “anticipates”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements of the Offeror and BHP Billiton to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including the risk that all conditions of the Offer will not be satisfied. Many of these risks and uncertainties relate to factors that are beyond BHP Billiton’s ability to control or estimate precisely, such as future market conditions, changes in regulatory environment and the behavior of other market participants. BHP Billiton cannot give any assurance that such forward-looking statements will prove to have been correct. The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. BHP Billiton disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of any member of the BHP Billiton Group, PotashCorp or the enlarged BHP Billiton Group following completion of the Offer unless otherwise stated.
BHP Billiton plc is a diversified natural resources company. The Company is engaged in extracting and processing minerals, oil and gas from its production operations located primarily in Australia, the Americas and southern Africa. It sells its product worldwide with its marketing activities centralized in Singapore, The Hague and Antwerp. The Company operates in nine customer sector groups (CSGs): petroleum, aluminum, base metals, diamonds and specialty products, stainless steel materials, iron ore; manganese, metallurgical coal, and energy coal. Its Petroleum CSG is a global oil and gas business with producing assets in six countries and exploration opportunities in a further six countries. During the fiscal year ended June 30, 2009 (fiscal 2009), the Company realized annual production volumes of 137.2 million barrels of oil equivalent. Its sells its crude oil production to refiners worldwide at market prices.