The Successful Investor Hotline – Friday, August 20, 2010

Article Excerpt

POTASH CORP. OF SASKATCHEWAN, $157.06, Toronto symbol POT, jumped 35% this week after Australia-based BHP Billiton Ltd. (New York symbol BHP) launched a hostile takeover bid for the company. (BHP is the world’s largest mining company, and a recommendation of our Wall Street Stock Forecaster newsletter.) Potash Corp. is the world’s largest fertilizer producer. It has six potash mines in Saskatchewan and one in New Brunswick. Five of its mines have reserves of between 60 and 97 years. BHP is developing a potash mine near Potash Corp.’s operations in Saskatchewan, so a takeover of Potash Corp. would let it cut some costs. In October 2009, rumours of a takeover bid by BHP helped push up Potash Corp.’s shares to around $106 from $93. BHP is offering $130.00 U.S. a share in cash, which Potash Corp. considers “grossly inadequate.” Despite this, BHP plans to mail its offer directly to Potash Corp. shareholders. In response, Potash Corp. has adopted a shareholder-rights plan. This plan gives…