Potash Corp. Shareholder Opposes BHP's Hostile Bid

Strategic Insights -

Stephen Jarislowsky, the chief executive of Montreal-based investment firm Jarislowsky Fraser Ltd. and the third-largest shareholder of Potash Corp. of Saskatchewan Inc., has expressed opposition to BHP Billiton Ltd.'s $38.6 billion hostile bid for the fertilizer producer. Jarislowsky believes the price offered by BHP is too low and that a deal would complicate his job as a fund manager. He also fears that a takeover by BHP would leave Canada's stock market without a diverse portfolio, which is detrimental to pension funds that need to invest in Canadian stocks to match their liabilities in Canadian dollars.

Key Takeaways:

  • Stephen Jarislowsky, the third-largest shareholder of Potash Corp., opposes BHP Billiton's $38.6 billion hostile bid for the fertilizer producer, citing the price as too low.
  • Jarislowsky fears that a takeover by BHP would leave Canada's stock market without a diverse portfolio, which is detrimental to pension funds that need to invest in Canadian stocks to match their liabilities in Canadian dollars.
  • Potash Corp. has filed a lawsuit in U.S. District Court in Chicago to block BHP's takeover attempt, alleging false and misleading statements in violation of U.S. securities laws.
  • Jarislowsky believes that BHP is being opportunistic by making a bid during a period of declining fertilizer prices and that the offer undervalues Potash Corp.
  • As the chief executive of Jarislowsky Fraser Ltd., Jarislowsky's opposition to the bid is not only personal but also professional, as he needs to make decisions that are in the best interest of his clients.

Statistics:

  • The price offered by BHP Billiton Ltd. for Potash Corp. is $38.6 billion.
  • Potash Corp. is the world's leading producer of the fertilizer component after which it's named.
  • The United States District Court in Chicago is where Potash Corp. has filed a lawsuit to block BHP's takeover attempt.
  • The lawsuit alleges false and misleading statements in violation of U.S. securities laws.

Sources:

  • Dow Jones Commodities News Select via Comtex
  • Bloomberg News
  • Comtex SmarTrend Alert via Comtex News Network, Inc.