Wednesday, August 18, 2010

Some Potash

What’s up with all of this sudden M&A activity? I couldn’t help, but get my hands on some Potash Corp. of Saskatchewan (Ticker: POT). Yesterday, news came out that Potash rejected a $130 per share offer from BHP Billiton (Ticker: BHP), an Australian mining company. Today, BHP went hostile with an offer of $130 per share for Potash. I was in Potash many many years ago and know a bit about the company. In an up cycle, the earnings power of this company is explosive. We’re just in the beginning of an agriculture up cycle and BHP is trying to get this company on the cheap. I picked up some Potash this morning at $145.85. Many analysts are looking at an eventual take out price of $170 +, which I believe is very reasonable for both Potash and BHP shareholders.


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