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BHP Billiton competes for Potash

On August 20, BHP Billiton announced that an indirect wholly-owned subsidiary of BHP Billiton Plc, BHP Billiton Development 2 (Canada) Limited, commenced the previously announced offer to acquire all of the issued and outstanding common shares of Potash Corporation of Saskatchewan Inc., at a price of $130 in cash per PotashCorp common share.
 BHP Billiton Chief Executive Officer, Marius Kloppers
 
 
On August 20, BHP Billiton announced that an indirect wholly-owned subsidiary of BHP Billiton Plc, BHP Billiton Development 2 (Canada) Limited, commenced the previously announced offer to acquire all of the issued and outstanding common shares of Potash Corporation of Saskatchewan Inc., at a price of $130 in cash per PotashCorp common share.

The offer values the total equity of PotashCorp at approximately $40 billion on a fully-diluted basis, and is open for acceptance until October19.

In response, this Monday, Potash Corporation’s shareholders urged it not to accept the offer.

Potash Corporation has now said it is considering alternatives to BHP Billiton's bid and has been approached by other parties, but did not mention names.

However, market watchers have singled out Vale and China's Sinochem Group, a Brazilian resources giant, and Rio Tinto as possible bidders.

BHP Billiton stands strong

The prospect of possible rival bids has not influenced BHP Billiton’s current bid, which is currently the only one on offer.

Speaking at the release of BHP Billiton’s financial results for the year ended 30 June 2010 yesterday, BHP Billiton Chief Executive Officer, Marius Kloppers, promised not to overpay for control of Potash.

“We will remain disciplined,” Kloppers stated.

BHP Billiton experienced another strong set of financial results, with growth in Underlying EBITDA and Attributable profit of 10 percent and 16 percent respectively.

Furthermore, record sales volumes achieved in iron ore, metallurgical coal and petroleum with local currency costs well controlled across the group.


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