PotashCorp rallies amid speculation that low price makes takeover possible

  • 2 Jul 2016
  • The StarPhoenix
  • JEN SKERRITT
  • Bloomberg

PotashCorp rallies amid speculation that low price makes takeover possible

Potash Corporation of Saskatchewan, the world’s second-largest producer of its namesake fertilizer, is rallying amid rumours of a possible takeover of the Saskatchewanbased company.

PotashCorp gained 0.9 per cent to close at $21 in Toronto, after climbing as much as 6.6 per cent to $22.18, the highest price since June 24. The stock has declined 46 per cent in the past year.

There are rumours of several unsolicited bids for the company as the stock reached historical lows, said Jonas Oxgaard, an analyst with Sanford C. Bernstein & Co. A bid could come from any of the company’s competitors, including CF Industries Holdings Inc. or Agrium Inc., and BHP Billiton Ltd. could make a second attempt to acquire PotashCorp.

“I don’t think there would be a better time than this,” he said. “It feels like the time things would be consolidating,” Oxgaard said in a telephone interview from New York.

The company doesn’t respond to market rumours, PotashCorp spokesman Randy Burton said in email.

Canada rejected Melbournebased BHP’s US$40-billion hostile offer for Potash Corp in 2010, saying the bid failed to meet the criteria of providing a net benefit to the country. Saskatchewan is forecast to receive $420 million in direct royalties and taxes from the potash industry this fiscal year, down 24 per cent from $556 million a year earlier, government spokeswoman Deb Young said in an email on June 22.

PotashCorp cut its full-year profit forecast in April after crop nutrient prices declined and China delayed signing supply contracts. Potash prices have tumbled amid increased production and as farmers spend less on fertilizer amid lower agricultural commodity prices.

Uralkali PJSC is the world’s largest potash producer by output.

 

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on July 2, 2016, in economic impact, political, potash. Bookmark the permalink. Leave a comment.

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