BHP Billiton urged to go higher in bid for PotashCorp

Canadian investors yesterday pressed BHP Billiton to increase its now hostile offer for PotashCorp, warning that the mining giant's $130-a-share bid for the fertiliser company would be insufficient.

Shares in PotashCorp climbed as high as $147 yesterday as investors bet on the Anglo-Australian group raising its bid. The board of PotashCorp rejected the $38.5bn (£24.7bn) offer on Monday, describing it as "grossly inadequate" and saying BHP would have to return with a "big boy price".

Daniel Bubis, chief investment officer of Tetrem Capital Management, a Winnipeg-based PotashCorp shareholder, said another bidder, possibly from China, might emerge and BHP could need to go as high as $170 a share.

Of Chinese investors, Mr Bubis added: "This is obviously, longer-term, an extremely important commodity for them. Their diets are changing and there's a lot of mouths to feed, and that's not going to change."

BHP's bid formally opens today, with the company arguing that the all-cash offer represents a 20 per cent premium to PotashCorp's closing price last week. The offer period is likely to stay open beyond the 19 October deadline as Canadian regulators consider the merits of the takeover.

A number of UK-based analysts said that BHP would eventually wrest control of PotashCorp, but that the offer was likely to go higher. "The issue for BHP is about how much they are prepared to pay," one analyst said.

"At the moment BHP does not have to ask shareholders for permission, because at $130 a share, the offer represents less than 25 per cent of the group's value. We reckon they could go to about $154 a share without going to shareholders. Beyond that backers may be less sanguine."

Only class one merger and acquisition deals, or those that represent 25 per cent of a company's overall value, require shareholder backing. BHP declined to comment on whether it was prepared to increase the offer.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn