Mining giant BHP Billiton has picked up the first of the regulatory approvals it needs in its US$43 billion hostile takeover bid for PotashCorp.
The Australian mining firm on Thursday announced it has received “early termination” of the waiting period required under the U.S. Antitrust Improvements Act from that country’s Federal Trade Commission and its justice department’s antitrust division.
The end of the U.S. government’s required waiting period is effective immediately, BHP said Thursday, noting it still needs approval from Canadian competition regulators, among others.
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BHP added it “remains confident” that its offer for Saskatoon-based PotashCorp “will receive all remaining requisite regulatory approvals in due course.”
BHP on Monday announced it would extend its Oct. 19 deadline for shareholders to tender to its offer, after Canada’s federal Competition Bureau issued a supplementary information request on BHP’s bid.
BHP can’t complete its offer until 30 days after it deals with the bureau’s request, unless the federal Commissioner of Competition issues an advance ruling certificate or “no-action” letter before that time.
Thus, BHP on Monday extended its offer until 11:59 p.m. ET on Nov. 18.
BHP’s US$130 per share cash offer, launched last month, also needs some significant uptake from PotashCorp shareholders. BHP said it has picked up tenders for just 1,801 common shares of the fertilizer company as of Monday.
“Without merit”
The miner’s bid is also far from winning the approval of PotashCorp’s board and management, which earlier this week filed suit against BHP, alleging what it calls fraudulent and manipulative behaviour on the Australian firm’s part.
“We believe this lawsuit is entirely without merit and we will contest it vigorously,” BHP said in a statement. “While PotashCorp’s actions seek to deprive its shareholders of a fully financed all-cash offer, we do not believe this lawsuit will interfere with or delay our offer.”
PotashCorp, the biggest potash producer on the planet, has been publicly urging its shareholders to reject BHP’s offer. But BHP remains the only declared bidder for PotashCorp so far, thus blunting any suggestion that it should sweeten its bid.
PotashCorp last month also set up a “poison pill” policy on its shares to block any bidder from completing a hostile takeover.
If or when triggered by an unasked-for purchase of over 20 per cent of its shares, PotashCorp would automatically flood the market with cut-price shares, offered to every shareholder other than the unsolicited bidder, diluting the value of that bidder’s stake.
The poison pill allows for a takeover through a “permitted bid” or a negotiated deal, but PotashCorp has said BHP chose not to make a permitted bid.
