BHP Billiton
BHP Billiton (ASX:BHP) is a global leader in the resources industry.
Formed from a merger between BHP and Billiton, the company is a leader in the extraction and sales of most natural resources, and is particularily strong in Iron Ore, Coking and Thermal Coal, Copper, Zinc, Oil & Gas, Diamonds and most materials key to the production of steel.
BHP Billiton to acquire Athabasca Potash Inc for C$341 mln
BHP Billiton (LSE: BLT, ASX: BHP) is set to further expand its potash operations in Saskatchewan, Canada. The international resource giant has entered into a definitive agreement to acquire Athabasca Potash Inc (TSX: API) in a cash deal worth C$8.35 per share, or C$341 million.
Last week BHP green-lighted the US$240 million initial construction phase of its Jansen potash project, which is adjacent to API’s principle asset, the 6,900 square kilometre Burr project.
The API acquisition will give BHP access to a combined 14,000 square kilometres of prospective exploration ground in the world-class Saskatchewan potash basin. “This acquisition fits well with our existing projects and land positions in the Saskatchewan potash basin", BHP President of Diamonds & Specialty Products, Graham Kerr said, "[the acquisition is] consistent with BHP Billiton's strategy of building a strong potash resource position. We continue to pursue opportunities that fit within our portfolio and are aligned with our strategy of developing Tier 1, long life, low-cost, expandable assets.”
In July, API expanded the scope of its strategic review, initiated last year, to include potential mergers or acquisition opportunities. The BHP deal reflects a premium of 105% over API's share price on 15 July 2009, the day preceding that announcement. The price also represents a 25% premium over API’s closing price on 27 January 2010 and a 37% premium based on the volume weighted average price over the 60 trading days prior to 28 January 2010.
"API's board of directors has reviewed and explored a number of possible strategic options and it has concluded that BHP Billiton's offer is in the best interests of API's shareholders”, API chairman Dawn Zhou commented.
BHP has entered into lock-up agreements representing approximately 40% of API's fully diluted share capital in support of the takeover. The agreements are with API chairman Zhou, all company directors and certain major API shareholders.
Furthermore API has agreed not to solicit or initiate any discussion regarding any other business combination or sale of material assets. The international mining group has the right to match any superior proposal and API will be obliged to pay a termination fee of C$12 million should API recommend or approve an alternative / superior proposal.
BHP’s Jansen potash mine aims produce 8 million tonnes of agricultural grade potash per year, which would establish the mining giant as a significant potash producer. BHP began its evaluation of potential potash plays in Saskatchewan through a joint venture with Anglo Potash in 2006, and in July 2008 it bought out the Canadian company. The international mining group is also carrying out exploration and evaluation of the Boulder and Young properties, which is also located in Saskatchewan in the world's largest potash producing region.
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24/07/09 No decisions yet on BHP Billiton's huge Olympic Dam expansion project - or Yeelirrie uranium
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21/07/09 BHP Billiton's Q4 numbers to come in above analyst expectations
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07/07/09 Spotlight is on nickel - again
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04/02/09 BHP Billiton profit rises 57%, dividend up 41%
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07/01/09 Mining stocks outperform Top 50 Aussie stocks
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28/10/08 Federal Government rail decision opens up Pilbara iron ore
Other BHP Billiton news
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17/03/10 Seeing Machines shares soar on news of DSS order from BHP Billiton
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02/03/10 State funding to support BHP Billiton Olympic Dam expansion
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29/01/10 BHP Billiton approves US$1.93bln investment in its Western Australia Iron Ore business
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20/01/10 BHP Billiton achieves record iron ore production innfirst half but sees volatile commodity markets in short term
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07/12/09 BHP Billiton and Rio Tinto sign binding agreement to create iron ore joint venture
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21/10/09 BHP Billiton iron ore production rockets on China demand
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02/10/09 BHP Profit Forecast Raised 22% on Copper, RBS Says
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25/09/09 Bloomberg reports BlackRock increases bets on BHP Billiton
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17/09/09 BHP Billiton says China's coal imports "sustainable"
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12/08/09 BHP Billiton posts 62% H2 profit slump, expects commodity demand to strengthen over long term
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