Digging into the past

20 August 2010 By John Foley Follow @johnsfoley

The mining chief’s last big attempted deal with Rio Tinto fell flat. That raises the stakes for his $39 bln bid for Potash Corp. BHP’s latest target involves less regulatory risk and should not offend customers as much. Yet the hostile tone suggests familiar tactics.

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BHP Billiton on Aug. 18 formally launched a $130pershare cash offer for Potash Corp of Saskatchewan, valuing the fertiliser company's equity at $39 billion. The AngloAustralian miner said the deal would be conditional upon regulatory approval and required the acceptance of 50 percent of shareholders, but did not need approval from the target's board.

Potash Corp announced on Aug. 17 that it would use a shareholder rights plan that would permit it to issue new shares in the event a bidder acquires more than 20 percent of its stock. The plan lasts for 90 days, though BHP hoped it could be overturned earlier.

Potash Corp is being advised by Bank of America Merrill Lynch, Goldman Sachs and RBC Capital Markets. BHP is being advised by JPMorgan, TD Securities, Banco Santander, Barclays Capital, BNP Paribas and Royal Bank of Scotland. BHP has lined up syndicated financing worth around $45 billion.

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