Yesterday, 3:11 PM
- Potash Corp. (POT +1.5%) is preparing a new takeover approach for K+S (OTCQX:KPLUY), which likely would come next spring, Reuters reports, citing German investor newsletter Platow Brief.
- POT on Oct. 5 withdrew its €7.9B takeover proposal for K+S, citing the decline in global commodity markets and a lack of engagement by K+S management.
- Also: AGU +1.7%, MOS +1.8%, IPI -1%.
Fri, Oct. 30, 12:58 PM
- News this week included weak results and guidance from Intrepid Potash (IPI -5.4%), Potash (POT -2.8%), Bunge (BG -0.9%).
- Coming next week are earnings from Agrium (AGU -1.6%), Mosaic (MOS -2.1%) and CF Industries (CF +0.5%). While analysts have already sharply reduced estimates for the trio, Jaguar Analytics reminds POT and BG had also already seen big cuts, but still missed expectations and slashed guidance further.
Wed, Oct. 7, 11:48 AM
- Potash (POT +2.6%) is higher even as shares are downgraded to Hold from Buy with a $24.50 price target, cut from $37.75, at HSBC, which cites an "uncertain" commercial and financial strategy in light of the failure of the company’s proposed bid for K+S.
- The firm notes a significant decline in prices in the Brazilian potash market over the past two months, with the latest indicators reflecting a decline in prices to $290/ton or below, while also foreseeing negative implications for 2016.
- The downgrade reflects an unclear strategy as well as weaker fundamentals, HSBC says, adding that the attempt to purchase K+S implies that POT still looks for growth by acquisition, meaning shareholders "may not in the end pocket these sums or the value of stakes in ICL or SQM."
Mon, Oct. 5, 7:43 AM
- Potash Corp. (NYSE:POT) +4% premarket after saying it withdrew its offer for rival potash producer K+S (OTCQX:KPLUY), citing challenging market conditions and a lack of engagement by K+S management.
- POT had offered €41/share ($45.98) for the German company, valuing K+S at €7.9B ($8.8B), but K+S refused to negotiate, saying POT’s offer undervalued the company and that a takeover could cost jobs.
- An acquisition of K+S would have given POT an opportunity to realize savings from selling potash within North America from its own western Canada mines and from K+S's Legacy mine.
Mon, Sep. 21, 3:32 PM
- Potash (POT -3%) is downgraded to Underperform from Neutral with a $22 price target at Macquarie, which sees no letup in the multi-year slump in potash prices anytime soon; in fact, the firm thinks the downturn will grow significantly worse.
- The firm foresees an average potash price of just US$254/metric ton next year, down from more than $300 today, citing ongoing weakness in agricultural markets and depreciating currencies in emerging markets.
- Macquarie expects global potash demand to fall by 4.4M metric tons in 2016, and with China sitting on huge potash stocks, the balance of pricing power will shift toward buyers and away from sellers, which could lead to the collapse of the potash contract pricing system.
- Also: AGU -1.5%, MOS -1.6%, IPI -2.5%, SQM -0.9%.
Tue, Jul. 7, 3:48 PM
- Potash Corp. (POT -2.2%) reportedly would be open to raising its $8.6B bid for K+S (OTCQX:KPLUY) if the German company could reveal more value not currently seen by the Canadian company.
- POT's €41/share bid represents a 43% premium to the average weighted price of K+S shares over the past six months, but K+S CEO Norbert Steiner has said the Legacy project alone is worth at least €21/share on top of €29 for the German company’s existing operations.
- The market may be factoring in a better than 50-50 probability that a deal happens, but J.P. Morgan Ben Scarlett sees only a one-in-three chance of success, believing a deal would face substantial execution risk and anti-trust or other concessions.
- The firm thinks European and North American anti-trust authorities will examine the impact of a deal in their own regions, and perhaps invoke conditions that require approval from authorities in places such as Brazil, China and India.
Fri, Jun. 26, 2:50 PM
- Potash Corp.'s (POT -2.1%) attempt to buy rival K+S (OTCQX:KPLUY) and create a company capable of controlling up to 30% of the global potash market is likely to face pushback from the German company and regulatory hurdles, analysts say.
- WSJ reports that K+S is likely to reject the confirmed offer from POT, believed to come in at slightly more than €40/share ($44.80) in cash, since it is seen as undervaluing the dominant position the two could achieve in North America, where POT has major mines and K+S is developing its own mine.
- Many analysts say the combined large market share in North America, and in other markets including Germany, means that German regulators likely would reject a takeover, particularly since Germany nixed a similar takeover attempt in 1997.
- K+S has sunk €2B ($2.2B) into a new Canadian potash mine which should start up in late 2016, which will add low-cost capacity of 2M metric tons/year for K+S - and which POT seems to be trying to scoop up on the cheap, writes WSJ Heard on the Street's Helen Thomas.
Thu, Jun. 25, 2:24 PM
- Potash Corp. (POT +2.2%) is higher following reports that it is in early-stage discussions to acquire German potash supplier K+S AG (OTCQX:KPLUY).
- Any deal could value K+S at more than €7B ($7.9B), or €40/share, according to the Handelsblatt newspaper, which first reported POT’s interest.
- Bloomberg reports that K+S is likely to reject the POT offer because it deems the bid as too low.
Fri, May 29, 11:43 AM
- Potash Corp. (POT -2.3%) is downgraded to Hold from Buy with a $35 price target, cut from $39, at TD Securities, which says global potash prices have been moving sideways at best so far this year despite a number of supply curtailments.
- The firm says it sees few catalysts to move POT’s share price higher.
Thu, Apr. 30, 8:29 AM
- Potash Corp. (NYSE:POT) -2.5% premarket after reporting weaker than expected Q1 earnings and cutting its guidance for the year, warning that 2015 potash prices likely would be lower than expected.
- POT issues downside guidance for Q2, seeing EPS of $0.45-$0.55 vs. $0.57 analyst consensus estimate, and lowers its FY 2015 EPS outlook to $1.75-$2.05 from its previous view of $1.90-2.20 and $2.02 consensus.
- POT maintains its estimate for full-year potash gross margin of $1.5B-$1.8B and sales volumes of 9.2M-9.7M metric tons; it expects market conditions to support a stronger pricing environment for phosphate, and forecasts combined nitrogen and phosphate gross margin of $1.0B-$1.2B for the year.
- Guidance for potash sales volumes for the year was maintained at between 9.2 million and 9.7 million tons, as was its full-year potash gross margin view of between $1.5 billion and $1.8 billion.
- In Q1, potash gross margins rose 43% Y/Y to $428M, helped by higher realized prices and lower per-ton costs, with the average realized potash price of $284/metric ton up from $250 a year earlier; potash sales volumes were relatively flat at 2.3M tons, while sales volumes for both nitrogen and phosphate fell and prices improved.
Mon, Mar. 30, 11:58 AM
- The Canpotex North American potash consortium says it has finalized 2015 supply contracts with all of its major customers in China.
- Canpotex says shipments to China will reach at least 1.8M metric tons, up from 1.6M in 2014, and may be as much as 2.5M metric tons, depending on supply, demand and logistics; the group does not release price terms but says the contracts are at "current competitive levels."
- Belarusian Potash said earlier this month it signed a contract with China to sell potash for $315/ton including shipping costs, which was $10 more than last year’s price.
- Canpotex represents Potash Corp. (POT +1.5%), Mosaic (MOS +2.6%) and Agrium (AGU +1.5%).
Fri, Mar. 20, 10:49 AM
- Israel Chemicals (ICL +0.7%) says buying part or all of Chilean fertilizer company SQM (SQM +7.4%) would make a “good fit... big for us to swallow, but I’m sure we would look at it,” CEO Stefan Borgas says.
- Opportunities outside Israel have become more attractive for ICL as domestic problems pile up; a windfall tax on resources companies is due to come into effect in 2017 while ICL has failed to win approval for a phosphate mine in Israel because of environmental concerns.
- SQM plunged 17% Wednesday after Potash Corp. (POT +0.7%) withdrew three directors from the company’s board in protest at the handling of a tax probe.
Thu, Mar. 19, 3:29 PM
- Shares of Potash (POT -4.1%) are sharply lower after the Saskatchewan government announced new tax measures in its budget, which the company warns could cut as much as $100M from its profit this year.
- POT says it is in the middle of a $6B investment in the province, and that any government change in the tax rules at this stage would be unfair to the company.
- Shares also are hurt as China and Belarus agreed to a $10/ton increase to $315/metric ton for H1 China potash shipments, disappointing major producers that had been publicly aiming for up to a 10% increase.
- Also: AGU -3.2%, MOS -2.1%, SQM -3.9%, IPI -5.2%.
Wed, Mar. 18, 2:12 PM
- Shares of Chilean fertilizer company SQM (SQM -22.1%) plunge after the three representatives on its board from Potash Corp. (POT -0.4%) resigned yesterday in protest at its handling of a campaign financing scandal that has shaken the country.
- SQM fired its CEO on Monday and said it would comply with demands from Chile's government to hand over tax information, as authorities investigate whether money from SQM and other companies was siphoned off to fund electoral campaigns, but POT says requests that SQM fully cooperate were rejected.
- POT owns a 32% stake in the dual share structure of SQM, which has rights to huge nitrates and lithium reserves in Chile, and SQM investors now fear what will come next for the company.
Dec. 19, 2014, 2:54 PM
- Potash (POT +1.9%) is upgraded to Buy from Neutral with a $40 price target, up from $38, at UBS, citing the company's strong dividend and improving free cash flow.
- UBS says the planned closure of Mosaic's Carlsbad operations in Jan. 2015 and the current flood at Uralkali's Solikamsk-2 mine could remove 2.4M -3.4M metric tons of combined capacity from the market and provides an opportunity for POT to gain more volumes, which also could lead to higher pricing.
- POT’s dividend yields ~4%, and UBS believes it provides downside protection given that the dividend can be funded even if potash prices remain flat; the firm thinks that over time POT may be able to return excess cash to shareholders through an increased dividend or further share repurchases.
- Other potash producers are higher: MOS +2%, AGU +0.4%, IPI +2.6%.
Dec. 5, 2014, 10:56 AM
- Potash Corp. (POT +2.4%) is upgraded to Overweight from Neutral with a $40 target price, raised from $34, at J.P. Morgan, citing more favorable potash industry fundamentals and the company's declining investment spending.
- The firm expects POT to generate a 6.3% free cash flow yield in 2015 and a 7.1% free cash flow yield in 2016, as POT currently pays a 4% dividend.
- U.S. potash inventories are now 35% below their five year average, the firm says.
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