William J. Doyle, President and Chief Executive Officer of Potash Corporation of Saskatchewan Inc. (PotashCorp), leaves the Globe and Mail after speaking to journalists.Della Rollins/The Globe and Mail
The chief executive of Potash Corp. of Saskatchewan Inc. says the value of his company "far exceeds $170 [U.S.]per share," suggesting that Australia's BHP Billiton Ltd. - or any other bidder - will have to pay substantially more than the current stock price to win his approval.
BHP's $130 per-share offer, which values the company at $38.6-billion, is "a non-starter," Bill Doyle said in an interview with The Globe and Mail, during which he bluntly predicted that Potash Corp.'s stock would "blow the doors off" its record high of about $240 if the company were to stay independent.
"When you think about this company being sold for $130, $150, $160 or $170 - when you look at the future growth of this company and where we are going with the share price ... This deal has a long way to go," Mr. Doyle said.
"$170, that's crazy."
However, the decision will be made by Potash Corp. shareholders, he added.
Potash Corp. has argued BHP's bid is opportunistic, made just as it believes potash prices are poised for a recovery as fertilizer demand increases amid concerns of a global food shortage.
The company's stock reached an all-time peak of $239.50 on the New York Stock Exchange on June 17, 2008, before a wrenching dive as the commodity boom ended with a thud. The stock dropped as low as $49.60 just six months later during the financial crisis.
Before the BHP bid, the shares had regained enough ground to top $100 apiece.
Mr. Doyle argued that the market for fertilizer producers has improved enough since the bid in August that BHP's offer is now below where Potash stock would have been trading without it. He pointed to rival fertilizer maker Mosaic Co., which has risen almost 20 per cent since the BHP bid on optimism about demand. (There's little or no takeover premium built into Mosaic, since it is controlled by Cargill Inc.)
Mr. Doyle said the company is still in discussions with other potential bidders, and that he believes another offer will come.
"At the end of the day you are going to have a choice between a transaction, or the company being a standalone entity. I can tell you, I can make a very, very strong case that the best choice that could be made will be that the company is a standalone entity because we are going to blow the doors off the $240 share price.
"We just are, because we are positioned for growth like no other company in the world."