BHP Billiton gets hostile in bid for Potash

BHP Billiton has turned hostile after its US$38.5 billion ($54 billion) cash offer was rejected by the Canadian fertiliser giant Potash Corporation.

Marius Kloppers, the BHP chief executive, took his offer directly to PotashCorp's shareholders yesterday and reiterated the claim the US$130-per-share bid was an "attractive offer", stressing it was fully funded, would be paid in cash and represented a 20 per cent premium to PotashCorp's closing price the day before.

But PotashCorp maintains the price does not recognise the massive growth potential in the fertiliser market as infrastructure-building in the developing world and rising populations put increasing pressure on agricultural production. The company also points out that its shares were at US$240 less than two years ago.

PotashCorp stock has soared far above the bid price since BHP's approach, breaching US$147 yesterday. But Kloppers said all data on the fundamentals of the business were priced in after the company's recent results.

BHP has given no indication of whether it is willing to raise its price.

- Independent