By By The County Compass
Special to the Daily News
AURORA — Talk that Potash Corp., formerly known as PCS Phosphate, may be a takeover target of Australian mining behemoth BHP Billiton has been spreading.
Officials at the U.S. headquarters of Potash Corp. in Chicago would neither confirm nor deny that speculation. However, company spokesman Bill Johnson hinted the speculation is likely the result of a recent report issued by Bank of America Merrill Lynch.
“An analyst with that firm sort of ran the numbers on a possible acquisition,” Johnson said, “and that report was released (last) Monday. Other than that, we really can’t comment.”
Reports from Wall Street confirm analyst Jason Fairclough suggested cash-rich BHP Billiton might launch a hostile takeover that could drastically increase its bottom line.
By any standard, Potash Corp., the world’s largest fertilizer maker, is huge — with an estimated market capitalization of $32 billion and sales for the most recent year of $6.7 billion.
However, with a market capitalization of $207 billion and annual revenues of more than $50 billion, BHP Billiton is much, much bigger.
In fact, it is the world’s largest mining entity, created in 2001 by the merger of Australia’s Broken Hill Proprietary Company and the United Kingdom’s Billiton, which has Dutch and South African roots.
Fueling the rampant speculation that a bid might be forthcoming were reports from several Aurora residents that a half-dozen visitors from Holland and Belgium recently toured the sprawling phosphate mine near Aurora.
There is currently little overlap in the types of minerals mined by the two international conglomerates, but the titans are no strangers to each other.
BHP Billiton has a presence in Saskatchewan, the world headquarters of Canada-based Potash Corp. It also operates a diamond mine in Canada’s Northwest Territories.
In its most recent annual report, BHP Billiton signaled its intent to pursue possible acquisitions: “The company’s financial strength has been a clear competitive advantage during the severe economic downturn. It leaves us well positioned to invest in growth and participate in opportunistic mergers and acquisitions.”
Editor’s note: The Washington Daily News and The County Compass, a new newspaper serving Pamlico County and the Aurora area of Beaufort County, entered into a partnership in which The County Compass will provide the Daily News some of its articles about the Aurora area and the Daily News will provide The County Compass with selected articles, including sports stories about Southside High School.