Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, November 5, 2010

Article Excerpt

BHP BILLITON LTD. ADRs, $92.14, New York symbol BHP, rose 10% this week after the Canadian government said it would block its hostile takeover bid for Potash Corp. of Saskatchewan (New York and Toronto symbol POT). However, under the Investment Canada Act, which governs foreign takeovers of Canadian companies, BHP now has 30 days to modify its offer so that it is a “net benefit” to Canada. BHP’s offer is worth $38.6 billion. That’s equal to 15% of its $256.4-billion market cap. The company has room to raise its bid. That’s because BHP’s shares also trade on the London Stock Exchange, and British law would require BHP to hold a special shareholders’ vote if the value of any new bid is more than 25% of BHP’s market cap. At the time of the original announcement on August 17, 2010, the bid represented 21% of BHP’s market cap. If BHP drops the takeover attempt, it could use the cash it planned to spend…