Fertile takeover territory

27 August 2010 By Una Galani Follow @ugalani

The country’s weak protections for minority shareholders and limits on poison pill defences make hostile bids easier than in the U.S. BHP will need to raise its offer to win Potash Corp. But, the miner’s bigger challenge may be persuading its investors to support such a move.

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BHP Billiton will be able to squeeze out minorities shareholders in Canada's Potash Corp of Saskatchewan once it owns two thirds of the fertiliser group, which the miner's hostile takeover offer values at $39 billion.

The miner's current offer of $130 per share is conditional on over 50 percent acceptances. BHP's chief executive Marius Kloppers said on Aug. 25 that the miner does not currently own any shares in Potash Corp.

BHP is also likely to need approval for the transaction from its own shareholders if it raises its offer. Under UK listing rules, a vote is required if the acquisition exceeds 25 percent of BHP's total market capitalisation at the time the offer is launched.

The miner shares have fallen 5 percent since it launched its offer to acquire Potash Corp on Aug. 18.

The New York listed shares of Potash Corp closed on Aug. 26 at $145.

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