Just months after a failed takeover bid for the company, Potash Corp. of Saskatchewan is putting cash on the table for its shareholders.
Buoyed by a strong share price amid rising commodity prices, Potash Corp. said late Wednesday it's doubling its quarterly dividend and splitting its shares 3 for 1.
The move follows a heated battle for control of the western potash giant by BHP Billiton Ltd., whose proposed takeover was rejected by Ottawa.
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"Our shareholders have provided the important capital that has helped prepare our company for the next stage of growth," president and chief executive officer Bill Doyle said in a statement. "The doubling of our dividend reflects the confidence we have in the long-term drivers of our business and further commitment to using our strong cash flow to create value for our shareholders. Additionally, the increased number of shares resulting from the split should enhance trading liquidity in our stock."
The split will be conducted through a stock dividend. Investors who hold shares on Feb. 16 will be given two additional shares for each Potash Corp. share held. Because the split will take place before the next dividend payment, in May shareholders will receive 7 cents per share held.
Potash Corp. closed at $167.38 Wednesday, extremely close to the $170 price target that Mr. Doyle prescribed when asked what his company was worth in the midst of the hostile takeover bid from BHP Billiton Ltd.