BHP Billiton Extends Potash Offer To November 18, As POT Board Dithers

Potash Corporation of Saskatchewan (NYSE: POT) should have take the offer of BHP Billiton (NYSE: BHP) to buy it. Potash stock may never see the offer level again.

BHP said it “has amended and varied the terms of its all-cash offer to acquire all of the issued and outstanding common shares of Potash Corporation of Saskatchewan Inc. together with any associated rights issued and outstanding under the PotashCorp Shareholder Rights Plan, at a price of US$130 in cash per PotashCorp common share.”

On 20 September 2010, the Canadian Competition Bureau issued a Supplementary Information Request in respect of the Offer as is permitted by the Competition Act (Canada).

Under the Competition Act, the Offer cannot be completed until 30 days after BHP Billiton complies with the Supplementary Information Request unless the Commissioner of Competition issues an advance ruling certificate or “no-action” letter before that time, provided that there is no order issued by the Competition Tribunal in effect prohibiting completion at the relevant time. BHP Billiton intends to comply expeditiously with the Supplementary Information Request.

The time for acceptance of the Offer has therefore been extended until 11:59 p.m. (Eastern Time) on 18 November 2010 to allow time for completion of the regulatory review of the transaction (see “Regulatory Matters – Antitrust Matters – Competition Act” in Section 14 of BHP Billiton’s 20 August 2010 circular relating to the Offer).

Potash stock trades at $148.47. The stock has traded well below that level for over two years, and there is no reason to believe Potash management can keep the shares above $100 if the BHP offer is withdrawn.

Douglas A. McIntyre