After being turned down by the board of Potash (NYSE:POT) for their $40 billion offer for the company, BHP Billiton (NYSE:BHP) has gone hostile and will appeal directly to shareholders of the fertilizer company.
The board of directors of Potash believed the offer was far below the value of the company, and rejected it unanimously.
BHP will begin its direct appeal to shareholders on August 20, when they use a newspaper advertisement to start the process. A deadline for accepting the offer will remain open until 11:59 PM EDT on October 19, 2010.
Evidently BHP believes their offer of $130 a share will encourage shareholders to accept the offer, even though in New York it's trading at $147.22, gaining $4.05, or 2.83 percent.
But that's part of the strategy to generate the idea in the minds of shareholders that the company is desirable, and then coming in later with a higher offer which could be much more palatable and open to reception.
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