Potash Corp. moved Thursday to find a buyer willing to top BHP Billiton’s $39 billion hostile offer for the world’s largest fertilizer company as shareholders balked at a bid they consider too light to support.
If a deal goes through, it would mean an extraordinary payday for Potash Chief Executive Bill Doyle, who lives in Winnetka and runs the company out of offices in Northbrook.
At the end of 2008, Doyle owned more than 3 million stock options in the company — the majority of which can already be exercised and cashed in at profit. If BHP’s bid is successful at $130 a share, Doyle stands to gain roughly $400 million.
Potash Corp.’s shares have already surged well above BHP’s offer price, indicating that investors expect a sweetened offer or competing bids to materialize.
Most analysts and some investors have said that it may take at least $160 a share to clinch a deal. If so, Doyle’s stake could be worth close to $500 million.
Potash is soliciting alternative bidders willing to pay more than the $130 a share offered by BHP, the world’s largest mining company, a source close to the matter said.
At $39 billion, the total value of the BHP offer is the highest in any industry this year.
“Any time you get something like this you explore all your options,” said the source, who asked not to be named. “There are a lot of ways to get creative about this thing.”
The source told Reuters that Potash Corp. was confident that the alternative bids would emerge for the leader of an industry with huge growth potential. “The notion is that this is the Cadillac of the (fertilizer) business.”
Earlier Thursday, the Wall Street Journal reported Potash Corp. was exploring potential alliances with global chemical and agricultural companies, as well as Chinese sovereign banks, citing people familiar with the matter.
Potash Corp., based in the Canadian province of Saskatchewan, declined comment.
Earlier this week, Potash’s board flatly rejected the BHP bid, and the Australian mining giant said it would take the offer directly to shareholders, many of whom have said they’ll hold out for a richer deal.
The offer “is probably low relative to the long-term earning power of the company,” said Bob Gorman, chief portfolio strategist at TD Waterhouse . “We thought this was the opening salvo. Potash is in play.”
Potash Corp.’s New York-listed shares have climbed 33 percent since BHP made its offer, reflecting anticipation of a sweeter bid. The shares closed up 91 cents at $148.84 on Thursday, valuing the company at $43.8 million.
While Potash is based in Saskatoon in the Canadian province of Saskatchewan, Doyle usually sits in an office in Northbrook off the Edens Expressway. In fact, BHP Billiton CEO Marius Kloppers flew to Chicago on Aug. 12 to deliver his takeover proposal to Doyle.
Doyle grew up in the Chicago area and started his career as a fertilizer salesman with Chicago-based International Minerals & Chemical Corp., which later became IMC Global Inc. He joined Potash in 1987 as an executive and lived in Saskatoon while he was chief operating officer. When he became CEO in 1999, he moved back home.
Potash has had a sales office in the Chicago area for many years to be close to its U.S. customers in the heartland. In 2000, the company consolidated its U.S. sales offices in Northbrook. The Northbrook office employs about 200 and includes administrative positions.
Doyle is active in Chicago business circles. He is a director of the Western Golf Association and sits on the board of the Executives’ Club of Chicago, along with Estey, of Glenview, who is president of S&C Electric Co. in Chicago. Hoffman, of Lincolnshire, is a former senior executive with IMC Global.
Although Doyle spends about one week a month in Saskatoon, there is the perception in Canada that the company is run from Chicago, according to published reports.
Tribune reporter Ameet Sachdev contributed to this report.
