topleft
topright

Login or Register


Featured Blogger

The Chinese Economy is On a Slowing Boat
James Finnan

Red-Hot Thread

"The corporate brand is not only used to improve competitive positioning and express company aspirations, it can also be a powerful tool to motivate employees."

CFOZone Experts

Opinions and views from expert CFOZone members.


Sep 01
2010

Dukes flying in PotashCorp battle

Posted by dbedell in shareholder rightspotashpoison pillmergers and acquisitions, M&A;, DealsCanadaaustralia

dbedell

Few people would have cared—or understood—three weeks ago if someone had said that potash is a hot commodity. But with Australia’s BHP Billiton and Canada’s PotashCorp in a dukes up, all out brawl right now for control of the Canadian fertilizer firm, potash—and the fertilizer industry—have taken on new significance.

On Tuesday they took the battle to fresh heights—or depths as the case may be—when PotashCorp accused the Aussie mining firm of “highly-unethical” behaviour, as the FT reports.

BHP, it seems, took the step of contacting PotashCorp’s customers to “sow seeds of doubt and confusion about the future of PotashCorp”, according to a letter to customers from PotashCorp’s head of sales—Stephen Dowdle.

Apparently, BHP’s director of potash marketing (catchy title) made calls to PotashCorp clients—and not to solicit potash orders.

Dowdle added in his letter to customers: “..we consider this contact to be inappropriate and highly unethical.”

BHP launched the unsolicited $39 billion bid for the Canadian firm in mid-August. Just a day later, PotashCorp rejected the offer and put in place a ‘poison pill’ shareholder rights plan—to extend future formal merger talks and consider alternatives.

One interesting aspect of the battle is that Canada has a potash cartel—of which PotashCorp is a member—and BHP wants to pull the firm out of the cartel, according to the FT. What exactly their aim would be in doing so is unclear, since it is effectively a government-approved price-fixing scheme.

PotashCorp holds a 20 percent market share of the world’s potash supply.

Comments (0)Add Comment

Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.

busy
Copyright © 2009-2013 CFOZone. All rights reserved. CFOZone is a property of PSN, Inc.