PotashCorp goes to court in bid to block BHP buyout
Thursday 23 September 2010
PotashCorp of Saskatchewan, the world's biggest fertiliser company, went to the courts in the US yesterday to fend off BHP Billiton's $38.5bn (£24.6bn) takeover bid, accusing the Anglo-Australian miner of giving "false and conflicting information about BHP's offer and PotashCorp's prospects and true value".
BHP said the action was "entirely without merit", reiterating that its $130-a-share hostile bid was still the only offer on the table. PotashCorp, which has described the bid as "grossly inadequate", has sought interest from other parties and will have been buoyed by the news yesterday that the Chinese state-owned chemicals group Sinochem has hired Citigroup and Deutsche Bank to explore ways of scuppering BHP's tilt.
As the buyer of about 7 per cent of PotashCorp's output, China is concerned that a takeover by BHP may push up the cost of feeding its 1.3 billion people. However, Sinochem is aware that Canadian regulators may baulk at the idea of Chinese ownership of PotashCorp, and has already explored the possibility of taking a minority stake in the company, or joining forces with other investment groups. It is thought that Sinochem has already approached Singapore's Temasek Holdings with a view to forming a consortium. Deutsche and Citi did not comment.
BHP's senior management team is meeting investors in the US, many of whom also hold PotashCorp's stock. It also published its annual report yesterday, which detailed an inflation-busting 9 per cent pay increase for its chief executive, Marius Kloppers, who took home $11.3m (£7.2m) last year.
The deal makes Mr Kloppers, who has led BHP for almost three years, one of the FTSE 100's best-paid directors. According to the report, he was paid a basic salary and bonus of $4.4m (£2.8m), with pension, dividend and share-based payments making up the rest of his package.
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