Another example of SH Rights PlanWe all heard about the latest BHP attempt to acquire Potash...
AUG 25 2010
PotashCorp Shareholder Rights Plan Update
Saskatoon, Saskatchewan – As previously announced, Potash Corporationof Saskatchewan Inc. ("PotashCorp") adopted a Shareholder Rights Planon August 16, 2010.
The Rights Plan is intended to ensure that in the context of a formaltake-over bid, such as BHP Billiton's unsolicited offer to acquire allof the outstanding shares of PotashCorp for US$130 per share in cash,the Board of Directors of PotashCorp has sufficient time to explore anddevelop alternatives to enhance shareholder value, including competingtransactions which are presently being considered or which might emergein the future.
The Rights Plan enables potential acquirors to make a “Permitted Bid”without the approval of the PotashCorp Board, so long as a bidderadheres to certain requirements consistent with the objectives of theRights Plan noted above. However, BHP Billiton chose not to make aPermitted Bid despite being in a position to do so.
As indicated in PotashCorp’s August 23, 2010 news release, aftercarefully considering the BHP offer with the benefit of advice from itsindependent financial and legal advisors, the PotashCorp Board votedunanimously to reject the BHP offer and unanimously recommends thatPotashCorp shareholders reject the BHP offer and not tender theirshares. The PotashCorp Board further believes that the continuedoperation of the Rights Plan is in the best interests of the Company andits shareholders and other stakeholders.
As is typical for shareholder rights plans adopted while an issuer isaware of an actual or potential take-over bid, the TSX has deferred itsconsideration of the Rights Plan until the earlier of a decision by theappropriate securities commission regarding the Rights Plan andshareholder ratification of the Rights Plan. However, this does notaffect the validity of the Rights Plan or the rights issued thereunderand the Rights Plan remains in full effect notwithstanding the TSXpolicy of deferring its review.
About PotashCorp
Potash Corporation ofSaskatchewan Inc. is the world’s largest fertilizer enterprise bycapacity producing the three primary plant nutrients and a leadingsupplier to three distinct market categories: agriculture, with thelargest capacity in the world in potash, third largest in each ofnitrogen and phosphate; animal nutrition, with the world’s largestcapacity in phosphate feed ingredients; and industrial chemicals, as thelargest global producer of industrial nitrogen products and the world’slargest capacity for production of purified industrial phosphoric acid.PotashCorp's common shares are listed on the Toronto Stock Exchangeand the New York Stock Exchange.