Marius Kloppers, CEO of BHP Billiton (NYSE:BHP) is traveling to North America to work on convincing shareholders of Potash (NYSE:POT) that a deal between the two companies would be beneficial to both companies.
Working on keeping the bidding price within a reasonable range and managing the expectations of Potash shareholders, more than likely Kloppers will focus on the value of the $130 a share he already offered while he's in the region.
He wants to dampen the idea that there is going to be a further raising of the bid in order to acquire the fertilizer company.
Even so, Kloppers has implied there will eventually be a higher offer once regulatory hurdles are taken care of, which are expected to take as long as two months.
A higher bid could bring other challenges as well, as a bid of $47 billion would require BHP to get shareholder approval, based on stock market rules in the UK. That's because any acquisition over 25 percent of the market capitalization of a company in the UK much then get shareholder approval, which the $47 billion would be.
With the size of BHP, there has been a lot of pressure from shareholders for BHP to grow, and with few acquisitions out there which would have a significant and immediate impact on their bottom line, Kloppers will work hard to get the deal done.
Other BHP shareholders are concerned over the risks associated with the deal, including the amount of debt and if the continuing recession could damper the expected demand for potash in the near term.
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