BHP will up its takeover bid for Canadian fertiliser manufacturer Potash Corporation to US$40 billion after securing loans from six banks.
The loan involves four facilities; an US$25 billion 364-day loan with a one-year extension option, a three-year US$10 billion loan, a US$5 billion three-year revolving credit facility and a US$5 billion four-year revolving credit facility.
Five of the banks, Banco Santander, Barclays Capital, BNP Paribas, JP Morgan and the Royal Bank of Scotland, will underwrite the facilities while another, Toronto Dominion Bank, will act as the mandated leader arranger and book runner.
BHP yesterday made a hostile US$130 per share offer for Potash, which valued the company at US$38.56 billion.
The target rejected the bid, with chief executive Bill Doyle calling it “grossly inadequate.”
“We believe it is critical for our shareholders to be aware of this aggressive attempt to acquire their company for significantly less than its intrinsic value,” he said.
“We believe the BHP proposal is an opportunistic effort to transfer that value to its own shareholders.”