BHP goes hostile on $39 b Potash Corp bid

BHP Billiton, on Wednesday, said it was making its $130 a share offer directly to shareholders, bypassing Potash Corp’s board which a day earlier called the bid “grossly inadequate.”

Investors and analysts expect BHP to have to raise its offer after Potash Corp shares jumped a record 27 per cent to $143 a share on Tuesday, 10 per cent above the bid price. The company, sitting on an estimated $11 billion cash pile, is looking to capitalise on a resurgence of the global fertiliser industry.

BHP wants to become the largest fertiliser supplier to a world where survival means more farm production and China’s voracious appetite for commodities is expected to grow. BHP Billiton has long been interested in expanding into potash for its next spurt of growth, but investors had expected it to focus on growing its own assets.