BHP goes hostile on £24.9bn Potash Corp bid

BHP Billiton, the world's biggest miner, launched a hostile £24.9bn bid for Potash Corp after the Canadian fertiliser group's board rejected the world's largest takeover offer this year.

BHP Billiton said today it was submitting it directly to shareholders and bypassing Potash Corp's board, which a day earlier called the bid of $130 a share "grossly inadequate."

The Anglo-Australian miner, sitting on an estimated $11bn cash pile, is looking to capitalise on a resurgence of the global fertiliser industry following a collapse in demand during the global economic slowdown.

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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. "We firmly believe that Potash Corp shareholders will find the certainty of a cash offer, at a premium of 32 percent to the 30-trading day period average, very attractive and we have therefore decided to make this Offer directly to those shareholders," BHP Billiton Chairman Jac Nasser said in a statement.

BHP said it expected a deal to add to earnings in the second full fiscal year after completion and had arranged financing. It put total funds required for the deal at $43bn, including options and pension obligations.

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, including the Jansen potash deposit in Canada.

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