BHP Billiton launches hostile bid for Potash
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Thursday, August 19, 2010
Mining giant BHP Billiton has launched a $40bn (£25.8bn) hostile takeover bid of Canadian firm Potash Corp after having had an initial offer rejected.
On Tuesday, Potash, the world's largest fertiliser producer snubbed BHP's offer, saying it undervalued the firm.
BHP has offered to buy Potash for $130 per share.
Demand for fertiliser is expected to increase this year because of rising demand for meat in emerging markets, as more crops are needed to feed cattle.
On Tuesday, Potash, the world's largest fertiliser producer snubbed BHP's offer, saying it undervalued the firm.
BHP has offered to buy Potash for $130 per share.
Demand for fertiliser is expected to increase this year because of rising demand for meat in emerging markets, as more crops are needed to feed cattle.
In a statement, BHP said: "The acquisition will accelerate BHP Billiton's entry into the fertiliser industry and is consistent with the company's strategy of becoming a leading global miner of potash."
It added that its offer represented a 20% premium to Potash's closing share price on 11 August, the day before BHP's first approach to the company.