Notable Mergers and Acquisitions of the Day 09/21: POT/BHP, CLX, TEL/ADCT

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POT Hot Sheet

Overall Analyst Rating:
BUY (= Flat)

Dividend Yield: 1.4%
Revenue Growth %: -13.4%

The premier Saskatchewan, Brad Wall, questioned publicly on Monday whether a foreign takeover of Potash Corporation of Saskatchewan (NYSE: POT) is good for the Canadian province, amid the hostile takeover bid for the company from BHP Billiton Ltd. (NYSE: BHP).

"The question needs to be, 'Are Saskatchewan people, are Canadians better off as a result of this, is our economy stronger as a result of this very large deal?'" Wall said. "We're doing our homework, we'll see what all of that due diligence tells us, but as of today I'm having a hard time answering that question in the affirmative."

The Australia-based BHP launched a hostile $130 per share takeover bid last month aft the Board of Directors at Potash rejected the offer. The deadline for the takeover bid was extended by nearly one to November 18 after a Canadian regulator asked for more information.

A consortium of Chinese-owned companies has also been reported to be interested in making an offer for Potash.

Canadian Prime Minister Stephen Harper has the ability to block a foreign takeover of Potash if the deal is not a “net benefit” to Canada, and Harper has sought input from Wall on the matter.

"This government's position has not been to give a blank check to foreign takeovers," Harper said in Parliament. "There is a law in place. I have spoken about the particular case with the premier of Saskatchewan and obviously we will examine his concerns as we do the review that is required under the Foreign Investment Review Act."

BHP Billiton chief executive officer Marius Klippers said that rumors of another offer for Potash is just that, "speculation and rumors."

"The reality is there is only one cash bid on the table, which is ours," Kloppers said.

Shares of Potash are up 28 cents to $148.75 in premarket trade on Tuesday, while shares of BHP Billiton are down 40 cents to $73.53 on the New York Stock Exchange.
The Clorox Company (NYSE: CLX) announces $780 million sale of its auto care business to an affiliate of Avista Capital Partners.

The transaction is expected to close by the end of 2010.

CLX expects the transaction to be dillutive to FY11 EPS by $0.20 - $0.25.
Tyco Electronics (NYSE: TEL) announced that they have extended their $12.75 per share cash offer for ADC (Nasdaq: ADCT) to 5:00pm EDT on October 18, 2010.