The chief executive of Potash Corp of Saskatchewan Inc said on Tuesday he believes BHP Billiton Ltd will not be the only bidder for the world’s largest fertilizer company.
Chief executive officer Bill Doyle said on a video posting on Potash Corp’s Web site that a number of parties have expressed an interest in alternative transactions. He said they have approached some and others have initiated contact.
Doyle said while they continue to discuss those options, they believe that Potash is poised to achieve results as an independent standalone company that “far surpasses BHP’s inadequate offer.”
Australia’s BHP Billiton Ltd, the world’s biggest mining company, launched a hostile US$130-a-share takeover bid on Aug. 18 after Potash directors rejected its offer.
Potash is a potassium compound used in agriculture and industry.
Potash consumption has been growing over the past decade as the need for potash grows in tandem with the development of countries like China and India. The main markets are China, the US, Brazil and India.
“Our large investors have clearly communicated to us that the US$130 per share offer is a nonstarter. In fact, some of our long-term holders have been adding to their positions during this period,” Doyle said.
Doyle said they feel strongly they can create more value by pursuing alternative options or by continuing to execute on their strategic plan. He noted that over the last 15 years the compounded annual total shareholder return was 19 percent. He said that they expect the “process will be more like a marathon than a sprint.”
Chinese state-owned companies like Sinochem (中國中化) are reportedly interested in Potash Corp, but the provincial Saskatchewan government is concerned that a Chinese state-owned company would want to overproduce potash and drive down its price.
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