Potash One gets $434M takeover bid
Vancouver-based Potash One Inc. announced Monday it has agreed to be taken over by Germany's K+S Aktiengesellschaft in a deal worth $434 million.
The firm's board — which is headed by well-known mining entrepreneur Robert Friedland — has recommended the deal to shareholders.
Its shares closed up 25 per cent, or 91 cents, to $4.53 Monday on the Toronto Stock Exchange.
The junior potash mining firm said the bid is $4.50 a share in cash, which is a 31.3 per cent premium over its recent price.
Earlier this month, the Saskatchewan government granted an environmental permit for Potash One's Legacy project. That allowed the company to pursue licensing for construction.
"K+S is a highly qualified global leader with over 100 years of experience in the potash industry and … they have the technical and operational depth and the proven marketing and sales expertise to successfully bring Legacy forward." Potash One CEO Paul Matysek said in a release.
Demand for potash, a key fertilizer component, has risen as the global economy has rebounded and farmers around the world seek to improve crop yields.
BHP's bid for PotashCorp failed
BHP Billiton launched a hostile, $38.6-billion takeover bid earlier this year for Potash Corporation of Saskatchewan, the world's largest potash producer, but the proposed deal was turned down by the federal government, which ruled it would not be of net benefit to Canada.
It was unclear whether the deal involving Potash One — a much smaller company — would face the same scrutiny from Ottawa, though the company said it doubted this would be the case.
The deal, which still needs shareholder and regulatory approval, is expected to close by March of 2011.
With files from The Canadian Press