BHP buys Canadian potash miner for $357m
BHP Billiton Limited (BHP) said it had reached an agreement to buy Canadian potash miner, Athabasca Potash Inc (“API”). The Aussie miner said it would acquire all the shares of the company for C$8.35 per share (A$8.75), for a total consideration of C$341 million (A$357 million).
BHP Billiton paid a 25% premium to the closing price for API shares on 27 January 2010, and more than double the share price from last July when the takeover was first mooted.
BHP Billiton Diamonds & Specialty Products President Graham Kerr said the purchase was consistent with the miner’s policy of building a strong potash portfolio.
"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,” Mr Kerr said.
”This acquisition fits well with our existing projects and land positions in the Saskatchewan potash basin.”
API, which is listed on the Toronto stock exchange, is a potash company that owns the Burr Project and various potash exploration properties in Saskatchewan, Canada. It also holds an exploration license covering nearly 7,000 square kilometres.
The Burr Project is located adjacent to BHP Billiton’s Jansen Project and some of API’s exploration properties neighbour BHP Billiton’s potash permit areas.
API said the purchase would go to a shareholder vote in early March.
At the close Thursday, BHP Billiton shares were $40.70.
Leave a Reply