Pot luck

18 August 2010 By Robert Cyran Follow @rob_cyran

The Canadian fertilizer group is willing to sell but only at a price well above BHP’s $39 bln offer. Getting an auction going is its best bet. Obvious players are hamstrung and short of time, but there are other options and the company s allure could draw out surprise bidders.

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BHP Billiton has gone hostile in its offer for Potash Corp of Saskatchewan. The Australian miner is offering $38.6 billion, or $130 per share, for the fertilizer company. Potash Corp has rejected the bid, calling it opportunistic and grossly inadequate.

Potash Corp also announced the adoption of a shareholder rights plan which enables the firm to issue new shares in the event a bidder or consortium of bidders acquires more than 20 percent of its shares. The plan lasts 90 days, and BHP hopes to invalidate it earlier.

Potash Corp is being advised by BofA 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 of more than $40 billion.

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