Potash looks to escape BHP's grip

The fertilizer maker believes BHP's $40 billion takeover bid undervalues the company. So, it's looking for an investor group to buy the company. The government reports low inflation but a wider trade gap.

By Charley Blaine Sep 16, 2010 9:19PM
Potash Corp. of Saskatchewan (POT) is trying to assemble a Chinese-led group of investors to back a leveraged buyout with senior management that would top BHP Billiton’s (BHP) bid, the Globe and Mail in Toronto reported today.


Potash shares were up 0.9% to $148.38. BHP was off 0.2% to $73.26 in New York.

BHP, the world’s largest mining company, has offered $40 billion, or $130 a share, for Potash, the world’s biggest fertilizer producer. 


The interest in Potash reflects the assumption that global food demand will surge in the coming years because of economic growth in Asia and Latin America.


Potash's shares have been wildly volatile in the last fives, rising nearly 800% between the end of 2005 and June 2008. They're down 38% since. 


Producer prices rise slightly

The Labor Department also said its Producer Price Index increased 0.4% in August; economists had expected a 0.3% increase. The index had risen 0.2% in July.


Core PPI, which excludes food and beverages, rose 0.1%, as expected, after climbing 0.3% in the previous month. The gains should ease  deflation fears.

 

The Treasury Department said the U.S. current account -- which registers both trade and capital transactions -- recorded a wider deficit of $123.3 billion in the second quarter. The figure was in line with expectations.


It also reported foreign net buying of $61.2 billion in U.S. stocks, bonds and financial assets in July. That suggested robust demand for U.S. assets. China remained the biggest investor in Treasurys.

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