PotashCorp. (POT) Could Trade Up to $157, With or Without the BHP Bid
Tweet
Share
E-mail
Get Alerts POT Hot Sheet
Join SI Premium – FREE
There is a compelling case being discussed that shares of Potash Corp. of Saskatchewan (NYSE: POT) will be just fine, or could actually go higher, if BHP (NYSE: BHP) drops their $130 per share bid.
Shares of PotashCorp are up just under 30% since the takeover bid was announced and rejected on August 17th. This is a great gain, and shares currently trade $15 above the takeover bid. However, looking at the performance of PotashCorp peers since the bid you will discover that they are in some instances performing better.
CF Industries (NYSE: CF) is up 40% during the same time frame, Mosaic (NYSE: MOS) is up 32%, Agrium (NYSE: AGU) is up 31%. and Intrepid Potash (NYSE: IPI) is up 28%. The average move in these four stocks has been 33%.
So looking at this data you could argue that POT should trade as high as $157 (CF move), and at least at $149 (average move), even if BHP drops the bid.
Some would argue that the POT takeover bid put an M&A premium into the market. However, looking at the surge in commodity prices since the bid, and likely QE 2 from the Fed, you could more convincingly argue that the moves in these stocks is commodity driven.
Another reason this data is important is because it could come into consideration when BHP is evaluating a higher bid. They know they will have to pay up.
Shares of POT are down 1.5 percent today to $145.
Shares of PotashCorp are up just under 30% since the takeover bid was announced and rejected on August 17th. This is a great gain, and shares currently trade $15 above the takeover bid. However, looking at the performance of PotashCorp peers since the bid you will discover that they are in some instances performing better.
CF Industries (NYSE: CF) is up 40% during the same time frame, Mosaic (NYSE: MOS) is up 32%, Agrium (NYSE: AGU) is up 31%. and Intrepid Potash (NYSE: IPI) is up 28%. The average move in these four stocks has been 33%.
So looking at this data you could argue that POT should trade as high as $157 (CF move), and at least at $149 (average move), even if BHP drops the bid.
Some would argue that the POT takeover bid put an M&A premium into the market. However, looking at the surge in commodity prices since the bid, and likely QE 2 from the Fed, you could more convincingly argue that the moves in these stocks is commodity driven.
Another reason this data is important is because it could come into consideration when BHP is evaluating a higher bid. They know they will have to pay up.
Shares of POT are down 1.5 percent today to $145.
Create E-mail Alert Related Categories
Insiders' Blog, RumorsRelated Entities
PotashCorp/BHPSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
