The world’s largest fertiliser manufacturer, Potash Corporation, has knocked back a US$38.56 billion takeover offer from BHP Billiton, calling it “opportunistic.”
The Canadian company’s chief executive Bill Doyle, called the offer “grossly inadequate,” but left the door ajar for future bids.
"I am not saying that we are opposed to a sale, but what I am saying is we are opposed to a steal of the company," he said.
Doyle believes BHP has timed its bid to coincide with the re-emergence of the fertiliser industry after it experienced an unprecedented loss of demand thanks to the global economic downturn.
He said the miner wanted to seize the value Potash is poised to create.
“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.”
The BHP offer of US$130 cash per share represented only a 16% premium to Potash’s Monday closing price of US $112.15 on the New York Stock Exchange and was well below the company’s record high of US$240 per share in mid-2008.
Furthermore, the bid has actually pushed the target’s share price up beyond the offer price to $143.17 per share.
BHP chairman Jac Nasser said the offer would provide Potash hareholders with value, certainty and an immediate opportunity to realise the value of their shares in the face of volatile equity markets.