BHP TAKOEVER PLAYBOOK
Case Study 1:
Potash Corp, Canada
https://www.theguardian.com/business/2010/aug/18/bhpbilliton-hostile-bid-potash-corp
"BHP Billiton mounts hostile bid for Potash Corp."- The Guardian, Wed, 18 Aug 2010.
Quote:
"BHP Billiton has launched a HOSTILE takeover bid for Potash Corporation, the Canadian fertiliser co, after its i n i t i a l bid was r e j e c t e d yesterday."
"BHP*s offer is 20% PREMIUM on Potash*s share price BEFORE the the proposal went public."
"However, the co shares JUMPED by 30% as traders a n t i c i p a t e d that BHP would have to i n c r e a s e its offer."
"BHP announced this morning that its taking its $40b cash offer DIRECTLY to Potash SHAREHOLDERS. The Australian co made the move just a DAY AFTER it revealed that it had a l r e a d y been REBUFFED by the Potash BOARD."
COMMENT:
1) SP Angel*s Partners in the Video via this thread termed the BHP move of WED, 5 Sep 2018 as "hostile". Ref: BHP buys 6.1% in Solgold via Guyana Gold for US$35m valuing Solgold at US$600m.
2) The said BHP said buy as in notation 1, was at a 20% PREMIUM.
3)Solgold closed on Fri, 7 Sep 2018 up nearly 9%+ to 28.1 British pence [mid-price]. Intra-day high was 29.05 pence.
BHP*s offer to Guyana at 20% premium meant the shares of Solgold was at 26.59 British pence.
4) So, the London market also anticipated that BHP may have to pay more [perception] and therefore 20% premium to Guyana at 26.59p and 9%+ to 28.1 pence. To Buy was 28.5p and to Sell 28.1p on Fri, 7 Sep 2018. Also, on Thurs 6 Sep 2018, Investor*s Chronicle had tipped Solgold for their Fri magazine release but many saw it earlier, perhaps those who take the IC online.
5) Two years ago, Solgold had also "rebuffed" BHP*s Investment Proposal.
6)BHP style is to take their offer to shareholders. This is via the TENDER OFFER way instead of having to get the 29.95% Threshold. This was also done in the Orbis Gold [DGR] takeover - tender offer.
Note:
Many large corporations that are leaders in the industry follow their own corporate style. Hence, why one studies corporate styles via Case StudieS. So the above is One case.
WHAT HAPPENED?
1) "BHP turns hostile with $39bn Potash Bid."- Financial Times, 18 Aug 2010.
Quote:
"Potash attempted to raise defences on Tues by passing a "POISON PILL" shareholder rights plan. Bidders can APPEAL to Canadian regulators to strike down such defences..."
"Analysts and industry executives speculated that Potash Corp was seeking a BLOCKING DEFENCE involving Brazil*s VALE and Sinofert, a Chinese state fertiliser co. People close to the deal said these two co*s could act as "WHITE KNIGHTS" by agreeing 2 or 3 way Joint Ventures to enhance the group*s value."
"BHP will now wait to see whether price TENSION materialises and , if NOT, how many shareholders AGREE to TENDER SHARES at the $130 level. This is the 20% premium to its closing price before Aug 12, when BHP informed Potash Corp PRIVATELY of its intentions."
********
2)"BHP Walks Away From PotashCorp."-CBC News, 14 Nov 2010.
Quote:
"BHP has withdrawn its hostile takeover bid of Potash Corp, the Australian co said Sun. The co*s announcement comes about 10 days after the Canadian govt RULED the acquisition would not provide a benefit to the country."
Note: To read the articles [x2] as above, put the titles into the search engines.
Please check. DYOR. Just a case study [One] and is not representative of ALL.
(20min delay)
