BHP Billiton launched a hostile $39 billion bid for Potash Corp to become the world's top fertilizer maker after the Canadian group rejected this year's biggest takeover offer.
BHP Billiton, the world's biggest miner, said on Wednesday it was making its $130 a share offer directly to shareholders, bypassing Potash Corp's board which a day earlier called the bid "grossly inadequate."
BHP went hostile quickly to counter a "poison pill" defense after the Canadian company rolled out a shareholder rights plan, and six banks have agreed to underwrite a syndicated loan of more than $40 billion to BHP, banking sources said.
Investors and analysts expect BHP to have to raise its offer after Potash Corp shares jumped a record 28 percent to $143 a share on Tuesday, 10 percent above the bid price.
"Everyone's saying they'll have to pay more," said Tom Elliott, Managing Director of MM&E Capital based in Melbourne, a hedge fund that takes positions in M&A situations.
BHP London shares had lost 1.9 percent to 1881 pence by 1225 GMT, compared to a 1 percent fall in the UK mining index, after Australian shares closed down 4.4 percent.
Click here to see more...