Takeover by BHP at $8.15BHP Billiton Diamonds Inc. to acquire Anglo Potash Ltd.
CALGARY and TORONTO, May 12 /CNW/ - Anglo Potash Ltd. (TSXV: AGP) ("AngloPotash") and BHP Billiton Diamonds Inc. ("BHP Billiton") are pleased toannounce that they have entered into a definitive agreement whereby BHPBilliton will offer to acquire all of the issued and outstanding common sharesof Anglo Potash at a price of $8.15 cash per common share. The total equityvalue of the transaction is approximately $284 million on a fully-dilutedbasis. All amounts are in Canadian dollars. The $8.15 per share cash consideration represents a 34% premium over theclosing price of the common shares on the TSX Venture Exchange on May 9, 2008and a 36% premium based on the volume weighted average price of the commonshares over the 60 trading days prior to May 12, 2008. Anglo Potash's Board of Directors has unanimously approved theacquisition and recommends that shareholders vote their shares in favour ofthe transaction, following receipt of a fairness opinion from its financialadvisor. The transaction is to be completed by way of a statutory plan ofarrangement and will be subject to the approval of 66 2/3% of the votes castby Anglo Potash's securityholders and a simple majority of the votes cast bythe shareholders (other than BHP Billiton and its related parties) at aspecial meeting, which is currently anticipated to take place in July 2008.The acquisition will also require court approval. If Anglo Potash'ssecurityholders approve the acquisition and the requisite court approval isobtained, the closing is expected to take place in July, 2008. The informationcircular for the acquisition is expected to be mailed to Anglo Potash'ssecurityholders later in this month. Todd Montgomery, Anglo Potash's President and Chief Executive Officer anda director, and the other directors of Anglo Potash, Brent Walter, RandalLudwar, Corey Giasson and Joseph Montgomery have entered into a lock-upagreement with BHP Billiton under which they will irrevocably voteapproximately 26% of Anglo Potash's outstanding common shares (includingshares to be issued upon exercise of outstanding vested options) in favour ofthe transaction. The directors have agreed to exercise their vested options tovote the underlying shares in favour of the transaction. The lock-up agreementalso provides BHP Billiton with an option to acquire for $8.15 per share anaggregate of 5,300,000 shares of Anglo Potash representing approximately 16.7%of the outstanding shares from the directors of Anglo Potash if the definitiveagreement is terminated in certain circumstances. These shares, together withthe 1,039,093 previously-owned shares (or approximately 3.2%), representapproximately 19.9% of the outstanding shares of Anglo Potash. Anglo Potash has agreed not to solicit or initiate any discussionregarding any other business combination or sale of material assets. AngloPotash has also granted BHP Billiton a right to match any superior proposaland a termination fee of $10 million payable to BHP Billiton by Anglo Potashif the definitive agreement is terminated as a result of Anglo Potashrecommending or approving an acquisition proposal or entering into anagreement with respect to a superior proposal or similar circumstances. "We are pleased to take this step with BHP Billiton and believe theacquisition will benefit the shareholders of Anglo Potash," said ToddMontgomery. "We have been joint venture partners with BHP Billiton for twoyears of exploration and development, the success of which is underscored bytoday's excellent offer from BHP Billiton." BHP Billiton's President of Diamonds & Specialty Products, Graham Kerr,added that "I wish to thank Todd and his team for their continual support asour JV partner; we look forward to the next chapter in the potash explorationand development program and building upon our successful history of investmentand growth in Canada." Anglo Potash is being advised by Morgan Stanley & Co. Incorporated, andits legal counsel are Osler, Hoskin & Harcourt LLP and ProVenture Law LLP.Morgan Stanley has also provided an opinion to the Board of Directors of AngloPotash that, as of the date of the signing of the definitive agreement, andsubject to the assumptions and limitations on which the opinions are based,the consideration to be received under the offer is fair, from a financialpoint of view, to Anglo Potash's shareholders. BHP Billiton is being advisedby TD Securities Inc. and its legal counsel are Davies Ward Phillips &Vineberg LLP.