Shares in Potash Corp. were up about 27 percent in afternoon trading on the New York Stock Exchange after the company said its board had received and rejected an unsolicited takeover bid from BHP Billiton Ltd. The bid is worth about $38.49 billion. Potash said it undervalues the fertilizer producer.
BHP Billiton, an Australian natural resources company, is offering to buy Potash for $130 per share, a 16 percent premium over Monday’s closing price. Potash, which has its U.S. headquarters in Northbrook, said its board has adopted a shareholder rights plan, also known as a poison pill, to give the company time to better develop alternatives to enhance shareholder value.
It said the BHP Billiton bid is nonbinding and “opportunistic.”
“The fertilizer industry is emerging from the recent global economic downturn, and we feel strongly that PotashCorp shareholders should benefit from the current and potential value of the company,” Potash said. “Global demand for food is steadily increasing, creating an attractive operating environment for the entire fertilizer industry and, with our premier position, PotashCorp is uniquely poised to benefit.”
Last month the Canadian company reported its second-quarter net income more than doubled to $472 million, or $1.55 per share, as revenue surged 68 percent to $1.44 billion.
Ameet Sachdev contributed to this report.
