Canada's Potash Corp, the world's largest fertiliser maker, today formally rejected a hostile takeover from mining giant BHP Billiton worth $40 billion, adding it was exploring other offers.
Potash said in a statement that the bid made by the Anglo-Australian miner direct to its shareholders last week was 'wholly inadequate' and stressed that 'superior offers or other alternatives are expected to emerge'.
'Potash Corp has been approached by, and has initiated contact with, a number of third parties who have expressed an interest in considering alternative transactions,' the statement added.
'Discussions are being pursued with several of these third parties in order to generate value enhancing alternatives,' it said.
BHP launched its massive hostile bid for Potash on August 18, a day after the miner had an informal $40 billion proposal turned down.
The London-listed energy and metals giant wants to buy Potash Corp to enable it to expand in the agricultural sector amid soaring wheat prices and strong food demand to meet the needs of the world's rising population.
Potash is a fertiliser that is widely used in farming to replenish nutrients in soils and increase crop yields.
The cash offer was pitched at $130 per Potash share - the same level as BHP's earlier informal bid that Potash has already slammed as 'grossly inadequate'.
Potash today urged its shareholders to reject the hostile offer. 'The Potash Corp board of directors is unanimous in its belief that the BHP Billiton offer substantially undervalues Potash Corp and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects,' chief executive Bill Doyle said.
'We strongly urge shareholders to reject BHP Billiton's opportunistic offer and not tender their shares,' he added.
BHP Billiton is the world's biggest miner and produces coal and iron for the global steel industry, as well as a host of other metals and commodities along with oil and gas.
The group's fortunes have been built on recent years on soaring demand from China's booming economy but it also has huge interests across the globe. As well as snubbing the bid, Potash has outlined a plan to prevent a hostile takeover.
The Canadian firm last week said it would adopt measures allowing ordinary shareholders to buy more shares cheaply, should an outside party build up a single stake in the company of 20% or more.
BHP's move for Potash comes after it recently paid $320m for Athabasca Potash, which is also based in Saskatchewan and holds more than half the world's potash reserves.
