Tuesday, October 12, 2010

Will Goldman (NYSE:GS), BAC (NYSE:BAC) Find Potash (NYSE:POT) Rival Suitor to BHP (NYSE:BHP)?

The number of proposed alternative offers to BHP (NYSE:BHP) for Potash Corp. (NYSE:POT) are starting to sound more like conspiracy theories than actual possibilities being put together by Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC), who are working with Potash.

As news circulates about the alleged offers being put together, it's starting to smell more of desperation than entities being interested in Potash.

Even the desperation aspect isn't making much sense, as the offer was a fair one, and even if more money was offered, which may happen, that doesn't really seem to be the reason behind the strange behavior of Potash in the matter.

Just as strange are some of the supposed offers in the works. Everything from breaking up the company to sovereign wealth funds and pension funds have been mentioned as potential white knights for Potash in the latest round of news.

Tech Resources Limited (NYSE:TCK) has even been brought back into the picture, who have said in the past they have no interest. They and others have also been identified as partnering with other entities to battle the takeover.

The question of course is why they would bother. BHP doesn't have a fertilizer business at this time, and ultimately would control about 20 percent of the global market if the deal were to be approved.

Nobody really sees how this could harm the company or Canada, and with competition not a problem, it is getting more bizarre by the day as to the why of the resistance.

Less taxes have been offered as one reason for rejecting the offer, but over time that doesn't appear to be the case at all.

The emotion of the response implies it's personal rather than logical as to the resistance. That means individuals are against the offer for personal reasons rather than those being offered through media outlets.

Potash was recently sued by some shareholders stating this very thing.

1 comment:

Anonymous said...

Axtually I think you've missed the point. Potash wants to make the best deal possible...and $130 per share offer price when at one point they were selling for $230 a share, doesnt sound like that great an offer. You dont want to give the company away. I think POT is playing this fine...an offer at least 20% higher will eventually be had...maybe by BHP itself. Why the rush to sell when its being underpriced to begin with?