PCS is Now Officially on the Sell Block | Eastern North Carolina Now

    On August 17, 2010, BHP Billiton of Australia tendered an unsolicited offer to purchase Potash Corporation of Saskatchewan for 38.5 billion dollars (US currency), or 130.00 per share. At the point of this corporate announcement, they also flatly rejected the bid. Today they are reported to review the hostile takeover bid to advise shareholders of what action they should take.

    BHP Billiton operates as a diversified natural resources company in Australia, the Americas, and southern Africa. The company explores for and produces crude petroleum oil and liquefied natural gas; mines bauxite, refines bauxite into alumina, and smelts alumina into aluminum metal; mines various base metals, including copper, silver, lead, zinc, and uranium; explores and produces diamonds, titanium minerals, and potash; supplies nickel to the stainless steel industry; and explores iron, manganese, metallurgical coal, and thermal or steaming coal. Needless to say BHP Billiton is a very multifaceted corporation and could successfully integrate the world’s largest fertilizer plant into its strategic plan. The question is: How much are they willing to pay?

    On the day of the unsolicited offer, Potash’s stock rose over 30 dollars a share from about 112.00 to over 143.00 per share. The stock finished the week at 149.67. Analysts believe that the stock offer of 130.00 per share was too low, but 150.00 should be about enough to conclude the deal. Any price above the 150.00 per share price would manifest that BHP Billiton would be moving into the range of significantly over paying for this phosphate mining and refining enterprise. As of this publication, Potash’s book value is 22.50 per share.

    PCS (Potash Corporation of Saskatchewan), who mines and refines the phosphoric ore at the Richland Township facility, is Beaufort County’s largest employer and represents the county’s largest property tax payer. This facility made national news in 2009, when the EPA , egged on environmental zealots, tried to accomplish what had never been done: To stop the fully permitted mine expansion of an American mine (PCS) to make a political point just after the inauguration of “transformational” President Barack Obama.

    The PCS stip mine and reclamation project, in Richland Township, Beaufort County, North Carolina. image made sometime in 2007 by Stan Deatherage

    The EPA did not prevail in court and the law of the permitting process was upheld, devoid of favoritism, or the converse: The punishment of enemies of the bureaucracy of the Environmental Protection Agency, and their sycophants.

    Now the management of PCS has another obstacle to overcome - the unsolicited offer to purchase their company at a very high price. This time it is the marketplace of capitalists that will control the corporation's destiny, rather than the debilitating efforts of paper pushing bureaucrats, who want to save the planet by destroying one vital business after another. It remains to be seen, but the possible purchase of PCS by BHP Billiton should have much less of a negative effect upon Beaufort County’s economy than the EPA’s attempt to circumvent the regulatory permitting agencies' jurisdiction over the PCS mine expansion case nearly two years prior.