The worlds largest fertiliser producer, Potash Corporation, has urged its shareholders to reject a hostile takeover bid from BHP Billiton.
Mining giant BHP last week launched a $40bn �25.8bn hostile bid for Canadas Potash Corp after having had an initial offer rejected.
Potash reiterated that the bid was wholly inadequate, as demand for its products is expected to rise.
It said it expected superior offers or other alternatives to emerge.
Demand for fertiliser is expected to increase in the next few years because of rising demand for meat in emerging markets, as more crops are needed to feed cattle.
The Potash Corp board of directors is unanimous in its belief that the BHP Billiton offer substantially undervalues Potash Corp and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects, said Potash Corp chief executive Bill Doyle.
BHP has offered to buy Potash for $130 per share. Analysts have suggested that BHP, one of the worlds biggest mining firms, will need to increase its offer to secure acceptance.
Potash described the offer as highly opportunistic and said it was unhappy that the offer was only 16% above its share price the day before BHPs offer was announced.
Since then, its shares have been trading above the offer price. The company takes this as a sign that the offer is for less that it is worth.
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