Shares of Potash Corp. of Saskatchewan Inc. (NYSE:POT) after saying no to a takeover bid from BHP Billiton Ltd. (NYSE:BHP), which valued the company at $38.49 billion.
Potash rose to $141.86, gaining a huge $29.71 or 26.49 percent as of 2:09 PM EDT. That brought the market cap of the fertilizer company up to 42.14 billion, calling the bid from BHP "grossly inadequate.".
The bid from BHP was a 16 percent premium over their close on Monday.
Rejecting the offer was a big plus for Potash, with investor response suggesting another higher offer could be waiting in the wings.
Major fertilizer companies moved up on the rejection as well, with CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU)and Intrepid Potash (NYSE:IPI) all jumping by close to 5 percent or more.
The jump was from the feeling the overall sector is undervalued at this time and could be poised for a breakthrough, although that must be based on the realities of demand from economic conditions and not because they're down from a tight market.
President and CEO Bill Doyle said on a conference call with analysts that he didn't necessarily oppose selling the company, but said the "timing of the proposal is highly opportunistic and an ill-disguised attempt" to push up the share price of Potash before coming in with a higher offer later.
Doyle added his is "opposed to a steal of the company."
Confirmation has come from BHP Billiton that they have approached Potash concerning entering into discussions on the matter.
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