Potash & Ag Merger Offer Changes Sector Valuation Models (POT, BHP, MON, MOS, AGU, CF, IPI, MOO)
Posted: August 17, 2010 at 7:47 am
Agriculture and potash investors had one small deal to consider yesterday, but today investors have the mother load to consider. Potash Corp. of Saskatchewan (NYSE: POT) has rejected an unsolicited $130 per share acquisition from BHP Billiton plc (NYSE: BHP).
To make matters even more interesting, Potash Corp. also went defensive by adopting a shareholder rights plan that has a 20% trigger. The company claims that the terms of the merger grossly undervalue the company.
Potash shares are trading significantly higher this morning. Versus a $112.15 close on Monday and versus a 52-week trading range of $83.75 to $128.42, shares are trading up as high as $142.00 on over 400,000 shares with some two hours until the open.
If the price of this offer is not a game changing event for the agriculture, potash, and fertilizer sector, then nothing else is.
Mosaic Co. (NYSE: MOS) closed at $51.13 and shares are trading up over $56.00 pre-market versus a 52-week range of $37.68 to $68.28.
Agrium Inc. (NYSE: AGU) closed at $65.87 and shares are trading up over $70.00 pre-market versus a 52-week range of $45.16 – 73.85
CF Industries Holdings, Inc. (NYSE: CF) closed at $84.59 and shares are trading up over $90.00 pre-market versus a 52-week range of $57.56 to $110.00.
Intrepid Potash, Inc. (NYSE: IPI) closed at $23.96 and shares are trading up over $26.00 pre-market versus a 52-week range of $19.08 to $34.20.
Potash players may have a mixed business outlook on their own. With this valuing Potash Corp. at north of $38 billion, valuation models for the sector just changed.
JON C. OGG