Business as usual after offer rebuffed
Published 11:22 am Thursday, August 19, 2010
By By MIKE VOSS
PotashCorps attitude is business as usual after the fertilizer producer on Tuesday rebuffed BHP Billiton Ltd.s unwanted takeover bid as grossly inadequate, according to a PotashCorp spokesman.
It was grossly inadequate, said PotashCorp spokesman Tom Pasztor in a brief interview Wednesday. Our president and CEO (Bill Doyle) said he is opposed to a steal.
Paztor said the company, based in Canada, is not adverse to being bought, but only if it believes it is in the best interest of its shareholders. The PotashCorp board felt BHP Billitons offer missed the mark in several areas, he said.
Its still business as usual. Nothing has really changed, Pasztor said when asked how the fallout from Tuesdays actions could affect the PotashCorp (formerly PCS Phosphate) facilities near Aurora.
We are telling our employees Dont let this distract you, said Pasztor from his office in Northbrook, Ill.
PotashCorp wants its employees, no matter where they work, to keep safety foremost in their minds and activities, he said.
Tom Thompson, Beaufort Countys chief economic developer, said PotashCorp is an extremely valuable company, in part because of its phosphorous deposits, including those near Aurora.
I hope none of this has any adverse impact on the local PotashCorp presence, Thompson said in a brief interview Wednesday. I dont think it will.
PotashCorp Aurora has been a great corporate citizen in Beaufort County, he said.
I would hope we dont lose that, Thompson said.
After the rejection of the takeover offer, PotashCorps shares advanced 26 percent Tuesday. BHP Billiton had offered $130 for each PotashCorp share. PotashCorp is a major manufacturer of fertilizer.
That rejection helped stocks rally Tuesday, according to a report by The Associated Press.
PotashCorp shares shot past the bid price to a new 52-week high of $147.71. The increase came to $30.48 a share. BHP Billitons offer sent shares of other fertilizer makers leaping.
The announcement of the bid and Potashs rejection Tuesday helped feed the rally in stocks. Mergers and acquisitions activity tends to lift the market because it shows investors confidence in the economy, the AP reported Wednesday.
Another report carried by The Associated Press placed the takeover bid at $38.49 billion. The rejection was the subject of reports by international media outlets, and it was a discussed on a Wall Street Journal blog.
BHP Billiton, a mining operation based in Australia, has been interested in acquiring PotashCorp since at least last fall.
PotashCorps Board of Directors thoroughly reviewed BHP Billitons unsolicited proposal with the assistance of its independent financial and legal advisors and concluded that the proposal is grossly inadequate and it is not in the best interests of its shareholders for PotashCorp to enter into discussions with BHP Billiton, the release reads.
The PotashCorp Board of Directors unanimously believes that the BHP Billiton proposal substantially undervalues PotashCorp and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects, said PotashCorp Chairman Dallas J. Howe in the release.
In a letter dated Aug. 13 and sent to Howe to explain BHP Billitons offer, BHP Billiton Chairman Jacques Nasser wrote that the offer of $130 per share represents a 20% premium to PotashCorps NYSE closing price on 11 August 2010 and a premium of 32% to the volume weighted average trading price of PotashCorps shares on the NYSE for the 30 day trading period ended on that date.
In a letter written Tuesday and sent to Nasser, Howe makes clear PotashCorps position.
The Board determined that your proposal fails to adequately recognize the value of PotashCorps premier position in the industry, the value of our planned capacity expansions and the value of our equity investments, Howe wrote.