TORONTO, Oct 19 (Reuters) - Shares of Potash Corp of Saskatchewan rose 5 percent on Monday, after a research report touted the idea that mining giant BHP Billiton could afford making an all-cash bid for the world's largest fertilizer maker.
Bank of America Merrill Lynch analyst Jason Fairclough suggested that an all-cash bid for Potash Corp at a 30 percent premium could add to BHP earnings by 13 percent within a year or two of closing an acquisition.
Shares of Canadian-based Potash Corp rose 5.2 percent to $102.45 on the New York Stock Exchange and were up 5 percent at C$106.08 in Toronto on Monday morning. Shares of U.S.-based rival Mosaic Co were up 3.2 percent at $53.27 in New York.
The potash industry has been rife with speculation for months that Mosaic, or Potash Corp might be takeover targets for mining giants like Australia's BHP, or Brazilian rival Vale .
BHP has clearly stated its intention to expand into the potash business. It acquired the Jansen project in Saskatchewan in 2008 and has been studying the feasibility of building a potash mine at the site.
Fairclough noted that a BHP takeover of Potash Corp would provide the mining major with instant scale in the sector, while also giving it large, long-life, low-cost assets.
($1=$1.03 Canadian)
(Reporting by Euan Rocha; editing by Rob Wilson) Keywords: POTASHCORP/SHARES (euan.rocha@thomsonreuters.com; +1 416 941 8185; Reuters Messaging: euan.rocha.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Bank of America Merrill Lynch analyst Jason Fairclough suggested that an all-cash bid for Potash Corp at a 30 percent premium could add to BHP earnings by 13 percent within a year or two of closing an acquisition.
Shares of Canadian-based Potash Corp rose 5.2 percent to $102.45 on the New York Stock Exchange and were up 5 percent at C$106.08 in Toronto on Monday morning. Shares of U.S.-based rival Mosaic Co were up 3.2 percent at $53.27 in New York.
The potash industry has been rife with speculation for months that Mosaic, or Potash Corp might be takeover targets for mining giants like Australia's BHP, or Brazilian rival Vale .
BHP has clearly stated its intention to expand into the potash business. It acquired the Jansen project in Saskatchewan in 2008 and has been studying the feasibility of building a potash mine at the site.
Fairclough noted that a BHP takeover of Potash Corp would provide the mining major with instant scale in the sector, while also giving it large, long-life, low-cost assets.
($1=$1.03 Canadian)
(Reporting by Euan Rocha; editing by Rob Wilson) Keywords: POTASHCORP/SHARES (euan.rocha@thomsonreuters.com; +1 416 941 8185; Reuters Messaging: euan.rocha.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.