Potash evaluating 'several' alternatives
NORTHBROOK Potash Corp. of Saskatchewan Inc., fending off a $40 billion hostile offer from BHP Billiton Ltd., said it's studying alternatives to the bid amid rising prices for agricultural commodities. Potash has operations in Northbrook.
“We are evaluating several alternatives for our company a process that is active and ongoing, Chief Executive Officer Bill Doyle said in a letter to employees included in a filing and dated Wednesday. “We believe that a robust process, in which multiple alternatives are considered, is the best way to ensure the best possible outcome for our stakeholders.
Sinochem Group, China's largest fertilizer trader and cited by analysts as a likely counter bidder, may struggle to get state financial backing for a takeover, two people with knowledge of the matter said last week. The Ontario Teachers' Pension Plan is in talks with Temasek Holdings Pte about a possible bid, the Sunday Times reported Oct. 10.
Potash Corp., the world's largest producer of its namesake crop nutrient, in August rejected Melbourne-based BHP's offer as too low and said it's seeking other bids. Doyle said in the filing the company is unable to provide specific details on “potential options.
Potash Corp., based in Saskatoon, Saskatchewan, pledged in a separate statement to relocate executives responsible for legal affairs, human resources and investor relations to its home province from company offices in Northbrook.
Senior Potash Corp. executives, including the chief executive officer, chief financial officer and the president of the potash unit, will also “maintain residency in the Canadian province, according to the release.
Doyle maintains a residence in Saskatoon and in Chicago, Bill Johnson, a company spokesman, said in a telephone interview.
Potash Corp.'s promise to return jobs to Saskatchewan is in response to earlier commitments by BHP, the Melbourne-based mining company said Thursday in an e-mailed statement.
“Under BHP, the global potash team, including its president, would live, work, pay taxes and raise their families in Saskatchewan as well as maintaining a residence in the province, BHP said in the statement.
The value of Potash Corp. “significantly exceeds BHP's $130-a-share offer, Doyle said in the letter to employees, citing the market outlook for crops, potash and fertilizer.
“The combination of strong food demand and production issues has had a predictable impact on agriculture commodity prices, with most key global crops well above their 10-year average, he said. The company's nitrogen and phosphate businesses are also benefiting, he said.