Canada’s Potash rejects $38 billion offer from BHP

Canada’s Potash Corporation, the world’s largest fertiliser producer, said yesterday it had rejected an unsolicited bid from Australian mining giant BHP Billiton worth $38 billion.

The company said the BHP offer of $130 a share in cash, a 16 per cent premium, was “grossly inadequate” given Potash Corp.’s prospects.

Potash Corp. at the same time adopted measures designed to prevent a hostile takeover of the company.

In a statement on its website dateline Saskatoon, Saskatche-wan, the firm said its directors “thoroughly reviewed BHP Billiton’s unsolicited proposal... and concluded that the proposal is grossly inadequate.”

It said the offer “substantially undervalues Potash Corp. and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects”.

Potash Corp. chairman Dallas J. Howe said shareholders needed to be “aware of this aggressive attempt to acquire their company for significantly less than its intrinsic value,” describing the BHP offer as “an opportunistic effort to transfer that value to its own shareholders.”

The company said its business held a “premier position in a strategically vital industry”.

BHP Billiton, based in Australia, is the world’s biggest miner, producing coal and iron for the global steel industry as well as a host of other metals and commodities along with oil and gas.

Its fortunes have been built on recent years on soaring demand from China’s booming economy but it has huge interests worldwide.