K M&A

17 August 2010 By Robert Cyran Follow @rob_cyran

BHP s huge $39 bln offer for Potash Corp highlights a trend. Demand for potash fell off a cliff in 2009. But it will more than recover as growing prosperity leads people to eat more foods that need fertilizer. High barriers to entry favor acquisitions over digging new mines.

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Potash Corporation of Saskatchewan on Aug. 17 rejected as grossly inadequate a $39 billion, $130 a share unsolicited offer from Australian mining company BHP Billiton. The offer is at a 16 percent premium to Potash Corp's closing share price on Aug. 16.

Potash Corp has also adopted a poison pill to discourage hostile buyers from acquiring more than a 20 percent stake.

Separately, Russia is aiming at creating a national potash champion by merging Uralkali, which is controlled by oligarch Suleiman Kerimov and his allies, with Silvinit.

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