Potash attacks 'wholly inadequate' BHP offer

The world's biggest fertiliser company yesterday urged its shareholders to reject a £25 billion takeover bid from mining giant BHP Billiton.

Canada's PotashCorp described the approach as "wholly inadequate" and said it expected superior offers or other alternatives to emerge.

London-based BHP, which has operations in 25 countries, last week launched a hostile bid for Potash after directors of the company refused to back its offer. A market leader in the production of coal, copper and iron ore, it is betting that demand for agricultural fertiliser ingredients will rise as the developing world requires more meat and crops.

In a statement to shareholders, Potash chief executive Bill Doyle reiterated the board's opposition to the proposal, which he said failed to reflect the value of Potash's market position and "unparalleled" future growth prospects. "The board unanimously recommends that PotashCorp shareholders reject the BHP Billiton offer and not tender their shares," he added.

At $130 (84) a share, the offer from BHP represents a premium of 16 per cent over Potash's closing price on the day before the company's proposal.

Potash said it had been approached by and initiated contact with a number of third parties who have expressed an interest in alternative transactions.

"Discussions are being pursued with several of these third parties in order to generate value enhancing alternatives," the company added.