BHP Billiton makes hostile bid for Potash
"BHP Billiton today announced its intention to make an all-cash offer to acquire all of the issued and outstanding common shares of Potash Corporation," it said in a statement, one day after Potash snubbed an unsolicited approach.
"The offer values the total equity of Potash Corp at approximately 40 billion US dollars."
Potash is a key agricultural fertilizer that is widely used in farming to replenish nutrients in soils and increase crop yields.
However, the cash offer was pitched at 130 dollars per Potash share -- the same level as BHP's informal bid that Potash had rejected on Tuesday, arguing that it substantially undervalued the company.
As a result, BHP chairman Jac Nasser said his company had decided to put its offer directly to Potash investors.
"We firmly believe that Potash Corp shareholders will find the certainty of a cash offer, at a premium of 32 percent to the 30-trading day period average, very attractive and we have therefore decided to make this offer directly to those shareholders," Nasser said in the statement.
BHP Billiton is the world's biggest miner and produces 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 also has huge interests across the globe.