-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FE/+KCdTO+LLF/xdew/3zmDicgcLv48/kBhPekA36IThE77ly4bIT/n0EQkdRLjL lQlUA29dJM1rrZQnZfbTWg== 0000950123-10-078904.txt : 20100818 0000950123-10-078904.hdr.sgml : 20100818 20100818173123 ACCESSION NUMBER: 0000950123-10-078904 CONFORMED SUBMISSION TYPE: SC14D9C PUBLIC DOCUMENT COUNT: 37 FILED AS OF DATE: 20100818 DATE AS OF CHANGE: 20100818 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: POTASH CORP OF SASKATCHEWAN INC CENTRAL INDEX KEY: 0000855931 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC14D9C SEC ACT: 1934 Act SEC FILE NUMBER: 005-44283 FILM NUMBER: 101026395 BUSINESS ADDRESS: STREET 1: 122 1ST AVE S, STE 500 STREET 2: SASKATOON CITY: SASKATCHEWAN CANADA STATE: A9 ZIP: S7K 7G3 BUSINESS PHONE: 3069338500 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: POTASH CORP OF SASKATCHEWAN INC CENTRAL INDEX KEY: 0000855931 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC14D9C BUSINESS ADDRESS: STREET 1: 122 1ST AVE S, STE 500 STREET 2: SASKATOON CITY: SASKATCHEWAN CANADA STATE: A9 ZIP: S7K 7G3 BUSINESS PHONE: 3069338500 SC14D9C 1 c64453sc14d9c.htm SC14D9C sc14d9c
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Under
Section 14(d)(4) of the Securities Exchange Act of 1934
Potash Corporation of Saskatchewan Inc.
(Name of Subject Company)
Potash Corporation of Saskatchewan Inc.
(Name of Persons Filing Statement)
Common Shares, no par value
(Title of Class of Securities)
73755L107
(CUSIP Number of Class of Securities)
William J. Doyle
Potash Corporation of Saskatchewan Inc.
122 – 1st Avenue South, Suite 500
Saskatoon, Saskatchewan, Canada S7K 7G3
(306) 933-8500
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of the Persons Filing Statement)
Copies to:
     
Edward B. Winslow   William Braithwaite
Jones Day   Stikeman Elliott
77 West Wacker   5300 Commerce Court West
Chicago, Illinois 60601   199 Bay Street
(312) 782-3939   Toronto, Ontario, Canada M5L 1B9
    (416) 869-5500
þ   Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
 
 

 

 

     
Exhibit No.   Description
99.1
  News release, dated August 17, 2010, issued by Potash Corporation of Saskatchewan Inc.
 
    
99.2
  Potash Corporation of Saskatchewan Inc. investor presentation.
 
    
99.3
  Transcript of Potash Corporation of Saskatchewan Inc. conference call held on August 17, 2010.

 

EX-99.1 2 c64453exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     
(NEWS LOGO)   (POTASH CORP LOGO)
     
For Immediate Release   Symbol: POT
August 17, 2010    
Listed: TSX, NYSE    
PotashCorp’s Board of Directors Rejects BHP Billiton’s Unsolicited,
Non-Binding Proposal as Grossly Inadequate
Saskatoon, Saskatchewan — Potash Corporation of Saskatchewan Inc. (“PotashCorp”) today announced that its Board of Directors has received and unanimously rejected an unsolicited proposal from BHP Billiton Limited (ASX: BHP; LSE: BLT; NYSE: BHP) (“BHP Billiton”) to enter into a transaction under which BHP Billiton would acquire PotashCorp for US$130 per share in cash. PotashCorp’s Board of Directors thoroughly reviewed BHP Billiton’s unsolicited proposal with the assistance of its independent financial and legal advisors and concluded that the proposal is grossly inadequate and it is not in the best interests of its shareholders for PotashCorp to enter into discussions with BHP Billiton.
“The PotashCorp Board of Directors unanimously believes that the BHP Billiton proposal substantially undervalues PotashCorp and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects,” said PotashCorp Chairman Dallas J. Howe. “After careful consideration, and in the interest of transparency, our Board determined to proactively disclose BHP Billiton’s unsolicited, non-binding proposal to our shareholders. We believe it is critical for our shareholders to be aware of this aggressive attempt to acquire their company for significantly less than its intrinsic value. The fertilizer industry is emerging from the recent global economic downturn, and we feel strongly that PotashCorp shareholders should benefit from the current and potential value of the Company. We believe the BHP Billiton proposal is an opportunistic effort to transfer that value to its own shareholders.”
PotashCorp President and Chief Executive Officer Bill Doyle commented, “Global demand for food is steadily increasing, creating an attractive operating environment for the entire fertilizer industry and, with our premier position, PotashCorp is uniquely poised to benefit. We believe our Board and management team are successfully executing our business plan and producing strong results. With our unmatched asset base and proven strategies, we believe we are well positioned to exceed the expectations of customers around the world and deliver compelling value to our shareholders.”
In making its determination, the PotashCorp Board of Directors considered a number of factors including:
  •   The BHP Billiton Proposal Fails to Reflect PotashCorp’s Prospects for Continued Growth and Shareholder Value Creation: PotashCorp is poised to deliver strong earnings growth as agricultural fundamentals continue to strengthen, global demand for its products — especially potash — increases, and its strategic investments in new potash capacity uniquely position it to capture a disproportionate share of demand growth. The Company firmly believes it is on the verge of an inflection point, where potash demand will return to historical trend-line growth, supply will tighten, and pricing will improve. The powerful long-term drivers of the fertilizer business — population growth and improving diets in developing nations — changed little as a result of the global downturn, and the catalysts expected to fuel near- and medium-term demand are accelerating. A rising demand for food — coupled with historically low global grain inventories — support a powerful period of growth for agriculture. The PotashCorp Board believes that no other company is better positioned to capitalize on these growth opportunities.

1

 

      The Board is confident that PotashCorp can deliver significantly greater value to its shareholders than BHP Billiton’s inadequate proposal.
  •   PotashCorp is a Uniquely Valuable Asset: PotashCorp is uniquely positioned as the premier global producer with unparalleled potash assets in an industry characterized by substantial barriers to entry, few producers and no known product substitutes. The BHP Billiton proposal fails to adequately compensate PotashCorp shareholders for this strategic position and scarcity value. In addition, the BHP Billiton proposal does not reflect PotashCorp’s substantial recent and ongoing investments to increase capacity, the value of PotashCorp’s strategic equity investments in China, Chile, Jordan and Israel, and its unmatched ability to meet the needs of North American customers and growing offshore potash markets.
  •   The BHP Billiton Proposal Represents a Wholly Inadequate Premium For Control: At US$130 per share, BHP Billiton is proposing a premium of only 16% over PotashCorp’s August 16, 2010 closing stock price. This low premium does not reflect the strategic importance, scarcity value and quality of PotashCorp’s assets, or the unique opportunity PotashCorp affords to BHP Billiton or any other acquiror. Furthermore, the premium offered is substantially inferior even to average control premiums globally and in Canada.
  •   The BHP Billiton Proposal is Timed to Deprive PotashCorp Shareholders of Full Value: BHP Billiton is opportunistically attempting to transfer the upside value in PotashCorp to its own shareholders at the expense of PotashCorp shareholders. PotashCorp believes the timing of the BHP Billiton proposal is highly opportunistic and an ill-disguised attempt to exploit an anomaly in the equity market valuation of PotashCorp. PotashCorp believes that BHP Billiton intentionally launched its proposal just as the fertilizer industry emerges from an unprecedented demand decline associated with the global downturn in order to seize the value that PotashCorp is poised to create. The Company is confident that, given the demand growth and margin potential anticipated in the months and years ahead, the continued execution of PotashCorp’s strategic plan would deliver substantially more value to PotashCorp shareholders than the BHP Billiton proposal.
The Board of Directors communicated its response to BHP Billiton in a letter sent to its Chairman of the Board on August 17, 2010, the full text of which follows:
August 17, 2010
Jacques A. Nasser
Chairman of BHP Billiton Limited
BHP Billiton Centre
180 Lonsdale Street
Melbourne, VIC 3000
Australia
Dear Mr. Nasser:
The Board of Directors of Potash Corporation of Saskatchewan Inc. (PotashCorp) has reviewed your August 13, 2010 letter proposing that PotashCorp and BHP Billiton enter into discussions regarding a transaction in which BHP Billiton would acquire PotashCorp at US$130 per share in cash.

2

 

After carefully and thoroughly reviewing the contents of your unsolicited proposal, with the benefit of advice from our financial and legal advisors, we have unanimously concluded that your proposed price grossly undervalues PotashCorp and its strong prospects for continued growth and shareholder value creation.
In particular, we believe the timing of your proposal is highly opportunistic given that, among other things, the industry is still in the early stages of a recovery. In our view, PotashCorp is significantly and disproportionately undervalued as a result of our strategic decisions to match production with demand while continuing to invest in our infrastructure. The Board determined that your proposal fails to adequately recognize the value of PotashCorp’s premier position in the industry, the value of our planned capacity expansions and the value of our equity investments.
The PotashCorp Board strongly and unanimously believes that PotashCorp has a bright future as an independent company and nothing in your August 13, 2010 letter provides the basis for PotashCorp to alter its course. Accordingly, we do not believe the proposed transaction is in the best interests of our shareholders. As we are committed to open, transparent treatment of our shareholders and other stakeholders, we are making your proposal and our response publicly available.
Sincerely,
/s/ Dallas J. Howe
Dallas J. Howe
Board Chair
BofA Merrill Lynch, Goldman, Sachs & Co. and RBC Capital Markets are acting as financial advisors to PotashCorp and Jones Day and Stikeman Elliott are acting as its legal advisors.
About PotashCorp
Potash Corporation of Saskatchewan Inc. is the world’s largest fertilizer enterprise by capacity producing the three primary plant nutrients and a leading supplier to three distinct market categories: agriculture, with the largest capacity in the world in potash, third largest in each of nitrogen and phosphate; animal nutrition, with the world’s largest capacity in phosphate feed ingredients; and industrial chemicals, as the largest global producer of industrial nitrogen products and the world’s largest capacity for production of purified industrial phosphoric acid. PotashCorp’s common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange. As of June 30, 2010, 49.03% of the common shares were held in Canada, 37.59% of the common shares were held in the United States and 13.38% of the common shares were held outside of Canada and the United States.

3

 

For further information, please contact:
     
Investors   Media
Denita Stann
  Bill Johnson
Senior Director, Investor Relations
  Director, Public Affairs
Phone: (847) 849-4277
  Phone: (306) 933-8849
Email: ir@potashcorp.com
  Email: pr@potashcorp.com
 
    
 
  Eric Brielmann / Jamie Moser / Andrew Siegel
 
  Joele Frank, Wilkinson Brimmer Katcher
 
  Phone: (212) 355-4449
Web Site: www.potashcorp.com
This release contains forward-looking statements or forward-looking information (forward-looking statements). These statements are based on certain factors and assumptions including foreign exchange rates, expected growth, results of operations, performance, business prospects, evaluations and opportunities and effective income tax rates. While the company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Several factors could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to: future actions taken by BHP Billiton in connection with its unsolicited, non-binding proposal; fluctuations in supply and demand in fertilizer, sulfur, transportation and petrochemical markets; changes in competitive pressures, including pricing pressures; the recent global financial crisis and conditions and changes in credit markets; the results of sales contract negotiations with China and India; timing and amount of capital expenditures; risks associated with natural gas and other hedging activities; changes in capital markets and corresponding effects on the company’s investments; changes in currency and exchange rates; unexpected geological or environmental conditions, including water inflow; strikes and other forms of work stoppage or slowdowns; changes in and the effects of, government policy and regulations; and earnings, exchange rates and the decisions of taxing authorities, all of which could affect our effective tax rates. Additional risks and uncertainties can be found in our Form 10-K for the fiscal year ended December 31, 2009 under captions “Forward-Looking Statements” and “Item 1A — Risk Factors” and in our other filings with the US Securities and Exchange Commission and Canadian provincial securities commissions. Forward-looking statements are given only as at the date of this release and the company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
PotashCorp will host a conference call on Tuesday, August 17, 2010 at 8:30 am Eastern Time.
A slide presentation will accompany the conference call and
will be available on the Company’s website.
Please note the appropriate dial-in number for your location below
and call at least 10 minutes prior to the start time.
No reservation ID is required.
**********************************************
         
 
  From Canada dial:    1-877-354-7102
 
  From USA dial:    1-877-902-6545
 
  From elsewhere dial:   +1-412-902-6510
**********************************************
Alternatively, visit www.potashcorp.com for a live webcast of the conference call.
This news release is also available on the Company’s website.

4

 

Important Information
This press release is neither an offer to purchase nor the solicitation of an offer to sell any securities. PotashCorp will file a solicitation/recommendation statement on Schedule 14D-9 with the Securities and Exchange Commission (the “SEC”) within 10 business days following the commencement of an offer to purchase. Investors and security holders of PotashCorp are urged to read the solicitation/recommendation statement and any other relevant documents filed with the SEC (when available), because they will contain important information.
Investors and security holders may obtain a free copy of the solicitation/recommendation statement and other documents that PotashCorp files with the SEC (when available) through the website maintained by the SEC at www.sec.gov and through the website maintained by PotashCorp at www.potashcorp.gov. In addition, the solicitation/recommendation statement and other documents filed by PotashCorp with the SEC (when available) may be obtained from PotashCorp free of charge by directing a request to Potash Corporation of Saskatchewan Inc., 122 — 1st Avenue South, Suite 500, Saskatoon, Saskatchewan, Canada S7K 7G3, (306) 933-8500.

 

EX-99.2 3 c64453exv99w2.htm EX-99.2 exv99w2
Exhibit 99.2
1 1 Bill Doyle President & CEO PotashCorp.com Investor Presentation August 17, 2010 Wayne Brownlee Executive VP & CFO

 

2 Forward-Looking Statements This presentation contains forward-looking statements or forward-looking information (forward-looking statements). These statements are based on certain factors and assumptions including foreign exchange rates, expected growth, results of operations, performance, business prospects, valuation and opportunities and effective income tax rates. While the company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Several factors could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to: future actions taken by BHP Billiton in connection with its unsolicited, non-binding proposal; fluctuations in supply and demand in fertilizer, sulfur, transportation and petrochemical markets; changes in competitive pressures, including pricing pressures; the recent global financial crisis and conditions and changes in credit markets; the results of sales contract negotiations with China and India; timing and amount of capital expenditures; risks associated with natural gas and other hedging activities; changes in capital markets and corresponding effects on the company's investments; changes in currency and exchange rates; unexpected geological or environmental conditions, including water inflow; strikes and other forms of work stoppage or slowdowns; changes in and the effects of, government policy and regulations; and earnings, exchange rates and the decisions of taxing authorities, all of which could affect our effective tax rates. Additional risks and uncertainties can be found in our Form 10-K for the fiscal year ended December 31, 2009 under captions "Forward-Looking Statements" and "Item 1A - Risk Factors" and in our other filings with the US Securities and Exchange Commission and Canadian provincial securities commissions. Forward-looking statements are given only as at the date of this presentation and the company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

3 Agenda Situation Overview Key Reasons for Rejection Key Elements Supporting Rejection Concluding Remarks Appendix

 

4 PotashCorp today announced that its Board of Directors has received and unanimously rejected an unsolicited proposal from BHP Billiton to enter into a transaction under which BHP Billiton would acquire PotashCorp for US$130 per share in cash PotashCorp's Board of Directors thoroughly reviewed BHP Billiton's unsolicited proposal with the assistance of its independent financial and legal advisors PotashCorp's Board unanimously believes that the BHP Billiton's proposal substantially undervalues PotashCorp and fails to reflect our premier position in a strategically vital industry and our unparalleled future growth prospects In the interest of transparency, the Board determined to proactively disclose the proposal to inform shareholders of BHP Billiton's aggressive attempt to acquire PotashCorp for significantly less than its intrinsic value BofA Merrill Lynch, Goldman, Sachs & Co. and RBC Capital Markets are acting as financial advisors to PotashCorp and Jones Day and Stikeman Elliott are acting as its legal advisors Situation Overview Summary of BHP Billiton Proposal and Response of PotashCorp Board

 

5 BHP Billiton Proposal Fails to Reflect PotashCorp's Prospects for Continued Growth and Shareholder Value Creation Poised to deliver strong earnings growth as agricultural fundamentals continue to strengthen and global demand for its products increases Company firmly believes it is on the verge of an inflection point, where potash demand returns to historical trend-line growth, supply tightens, and pricing improves Investments in new potash capacity uniquely position it to capture a disproportionate share of demand growth PotashCorp is a Uniquely Valuable Asset The premier global producer with unparalleled potash assets in an industry characterized by substantial barriers to entry, few producers and no known product substitutes Unmatched ability to meet the needs of North American customers and growing offshore potash markets Substantial recent and ongoing investments to increase capacity, and strategic equity investments in China, Chile, Jordan and Israel Key Reasons for Rejection 1 2

 

6 BHP Billiton Proposal Represents a Wholly Inadequate Premium for Control Low premium does not reflect strategic importance, scarcity value, quality of assets or the unique opportunity PotashCorp affords to BHP Billiton or any other acquiror Premium offered is substantially inferior even to average control premiums globally and within Canada; Issue more acute given Board's belief that current stock price is far below intrinsic value BHP Billiton Proposal is Timed to Deprive PotashCorp Shareholders of Full Value BHP Billiton is opportunistically attempting to transfer the upside value in PotashCorp to its own shareholders at the expense of PotashCorp shareholders BHP Billiton proposal is highly opportunistic and an ill-disguised attempt to exploit an anomaly in the equity market valuation of PotashCorp PotashCorp believes that BHP Billiton intentionally launched its proposal just as the fertilizer industry emerges from an unprecedented demand decline associated with the global downturn in order to seize the value that PotashCorp is poised to create for its shareholder The Company is confident that, given the demand growth and margin potential anticipated, the continued execution of PotashCorp's strategic plan would deliver substantially more value to PotashCorp shareholders than the BHP Billiton proposal Key Reasons for Rejection (Cont'd) 3 4

 

7 7 Source: from view menu, turn off if not needed Key Elements Supporting Rejection

 

8 Source: USDA, FAO, UN, PotashCorp Fruit and Vegetable Consumption Grain and Oilseed Consumption Billion Tonnes 1 Population and Income Growth Drive Food Consumption A continuing rise in demand for food, unabated by the global economic downturn, supports a sustainable period of growth for agriculture Billion Tonnes

 

9 Percent World Grain Stocks-To-Use Ratio Tightening Based on crop year data. For example, 2010F refers to the 2010/11 crop year. Grain includes coarse grains and wheat 25 Year Average Strong grain demand and production issues in certain key growing regions drawing global grain stocks lower Source: USDA 1

 

10 Source: World Bank July 2010 Price - Percentage Increase Compared to 2000-2009 Average 1 Crop Prices Remain Well Above Historical Averages Global crop prices remain well above historical levels, reflecting the long- term challenge of meeting rising food demand

 

11 Source: USDA, PotashCorp $US/Acre 2010E based on USDA spring fertilizer prices of $511/ST KCl, $508/ST DAP and $448/ST Urea; $4.00/bu corn price and 163 bu/acre 1 US Avg Corn Economics - Expect 2nd Highest Returns in 2010 Near record farm economics support increased fertilizer demand and the potential for higher nutrient prices

 

12 Source: Bloomberg, IPNI, PotashCorp Percentage Change 000 MT KCl - 12 Month Rolling Av. 000 MT KCl Crop Prices North American Producer Potash Shipments Market appears to be on the verge of an inflection point, expected to support a powerful period of growth 1 Recent Signs of Return to Long-Term Growth Trend North American Producer Potash Inventory

 

13 Source: Fertecon, PotashCorp Million Tonnes KCl World Potash Shipments - Returning to Period of Growth * Based on historical annual potash demand growth rate of 3.0-3.5 percent. 1 Proposal timed to acquire PotashCorp before earnings begin to fully reflect a return to the historical trend-line growth in potash demand

 

14 Source: Fertecon, PotashCorp World Potash Operating Rate* 1 On the Verge of Reaching the Inflection Point PotashCorp strongly believes that a return to historical trend-line growth by 2011 will result in tightening potash supply and pricing improvements Forecast based on 3.5 percent demand CAGR 2000-2015 * Based on percentage of operational capability

 

15 Source: PotashCorp Million Tonnes Operational Capability Operational Capability 3.5MMT of existing "paid for" operating capability 5.9MMT of additional operational capability through Capex program - - of which 40% spent (approx $3B) PotashCorp Sales Forecast 1 Expanding Capability Provides Opportunities for Earnings Growth BHP Billiton's proposal does not compensate PotashCorp's shareholders for unmatched ability to capture disproportionate share of future growth opportunities

 

16 Source: Fertecon, British Sulphur, IFA, PotashCorp Million Tonnes KCl - 2009 to 2015 PotashCorp Operational Capability and Growth Potential Unmatched PotashCorp PotashCorp investments: ICL (14%), APC (28%), SQM (32%) and Sinofert (22%) Note: PotashCorp based on operational capability (what we could physically produce) while competitor capacity is stated nameplate, which may exceed operational capability 1 BHP Billiton's proposal ignores value inherent in PotashCorp's current and planned expansions that further advance PotashCorp's premier position in the potash sector

 

17 Million Tonnes KCl Source: Fertecon, Public Filings, PotashCorp PotashCorp Represents Majority of New Capacity Through 2014 Capacity PotashCorp Percentage of New Capacity** PotashCorp Equity Investments* Other Canpotex Members Other Producers * PotashCorp investments: ICL (14%), APC (28%), SQM (32%) and Sinofert (22%) ** PotashCorp based on operational capability (what we could physically produce) while competitor capacity is stated nameplate, which may exceed operational capability) 1 PotashCorp expected to capture majority of new demand growth through capacity additions, enhanced by exposure through equity investment positions

 

18 Full Value of Investments Not Reflected in PotashCorp Stock Price Source: Bloomberg, I/B/E/S, PotashCorp US$ per Share * Assumes: $345M EBITDA/$328 net income contribution; current multiples based on street consensus at August 13, 2010; market value of investments as at August 13, 2010 1 Premium implied by BHP Billiton's proposal materially reduced after considering market value of equity investments not fully reflected in PotashCorp's share price. BHP Billiton also ignoring control premium applicable to PotashCorp's major stakes in APC and SQM $7.4B US Value not recognized in current share price (~$8/share) Value not recognized in current share price (~$12/share)

 

19 PotashCorp Is a Uniquely Valuable Asset 2 Global leader in a vital industry - "The Saudi Arabia of Potash" Population growth and improving diets are irrefutable demand-side drivers Supply-side comprised of few players with substantial barriers to entry PotashCorp occupies a unique space within this industry creating substantial scarcity value Attractive portfolio of low cost brownfield expansion opportunities to capitalize on expected growth Further leverage through quality portfolio of equity investments PotashCorp among the extremely limited opportunities globally which satisfy BHP Billiton's stated investment criteria - market leadership, low-cost/high return products, expandable, export orientated and portfolio suitability Unique nature of PotashCorp commands superior control premium

 

20 PotashCorp Is a Uniquely Valuable Asset 2 "We should step back to our strategy that says we really only want very large, low cost, export-oriented [businesses] and then only in certain products. If we pass all the things in the market through that set of filters really, you find there's not that many of the types of assets that we want that trades." - Marius Kloppers - Wall Street Journal ("BHP Billiton CEO on Acquisition Strategy" Nov 09, 2009) "Opportunities to acquire tier-one assets in low-risk regions, well positioned to serve the Asian markets, do not come around very often." - Chip Goodyear - Mining Journal ("BHP Billiton snatches WMC from Xstrata" Mar, 11 2005)

 

21 21 Limited Number of Accessible Potash Platforms for an Acquiror Projected Future Potash Capacity of Current Industry Participants (2015) PotashCorp is one of only two widely held potash companies globally Reflecting Marketing Organizations & Equity Investments Global Participants 2

 

22 Source: Fertecon, British Sulphur, AMEC, PotashCorp Proposal Does Not Adequately Reflect Scarcity Value of PotashCorp * Based on nameplate capacity which may exceed operational capability (estimated annual achievable production level). ** Estimated costs for conventional greenfield mine in Saskatchewan 2 Potash (KCl) PotashCorp % World Capacity* #1 in world 20% World Capacity* # of Producing Countries Only 12 Producing Countries % Gov't Control 20% Time for Greenfield (including ramp-up) Minimum 7 years Cost for Greenfield (including infrastructure and potential purchase of deposit) CDN $3.5- $5.0 billion** 2 million tonnes

 

23 Source: Blue, Johnson & Associates, Fertecon, Public Filings, PotashCorp World Class Nitrogen and Phosphate Assets PotashCorp Phosphate Rock Reserve Life* Years Million Tonnes Product *Proven and probable reserves permitted and to be permitted as of December 31, 2009 2 In addition to our leadership position in potash, PotashCorp has large-scale, low-cost Trinidad assets and high-quality phosphate rock reserves in Aurora Low-cost Western Hemisphere Ammonia Capacity *Tringen is the Government portion only

 

24 Source: PotashCorp $US/tonne Netback Required (fob mine) Key Assumptions: 2-million-tonne project constructed in Saskatchewan, plus cost of infrastructure; Minimum 7 year development and ramp-up timeline; $US/CDN at par PotashCorp Q2 2010 Netback = $309/MT Estimated netback range required based on capital cost scenarios Proposal Does Not Adequately Reflect Scarcity Value of PotashCorp 2 Greenfield investment economics unattractive at current potash prices, highlighting value of PotashCorp's premier position and brownfield opportunities

 

25 Historical Premiums in Marquee Canadian Resource Transactions 3 BHP Billiton's proposal does not recognize PotashCorp's marquee status in the global resource sector Source: Bloomberg Percentage* * Premium represents the final offer price relative to the unaffected price

 

26 Proposal Timed to Deprive PotashCorp Shareholders of Full Value 4 Source: FactSet, PotashCorp, Bloomberg as of August 13, 2010 Operating Rate $/Share PotashCorp share price poised to recover as demand and operating rates rise PotashCorp Op Rate* PotashCorp Stock Price Global ex PotashCorp Op Rate * Based on percentage of operational capability

 

27 EBITDA Potential Scenarios (at 2015 Operational Capability)* $US Billions EBITDA Potential Scenarios (at 2011 Operational Capability)* $US Billions Source: PotashCorp 4 Proposal Timed to Deprive PotashCorp Shareholders of Full Value BHP Billiton's proposal fails to reflect PotashCorp's substantial earnings leverage from higher potash prices and volumes * Assumptions include: gross margin for phosphate and nitrogen between $0.5 - $1.0 Billion (USD); Tax rate of 27 percent and PPT as a percentage of potash gross margin: 2011 (6-14 percent); 2015 (13-20 percent)

 

28 28 Source: from view menu, turn off if not needed Concluding Remarks

 

29 BHP Billiton Proposal Fails to Reflect PotashCorp's Prospects for Continued Growth and Shareholder Value Creation PotashCorp is a Uniquely Valuable Asset BHP Billiton Proposal Represents a Wholly Inadequate Premium for Control BHP Billiton Proposal is Timed to Deprive PotashCorp Shareholders of Full Value Concluding Remarks

 

30 30 Source: from view menu, turn off if not needed PotashCorp.com Thank you.

 

Important Information
This presentation is neither an offer to purchase nor the solicitation of an offer to sell any securities. PotashCorp will file a solicitation/recommendation statement on Schedule 14D-9 with the Securities and Exchange Commission (the “SEC”) within 10 business days following the commencement of an offer to purchase. Investors and security holders of PotashCorp are urged to read the solicitation/recommendation statement and any other relevant documents filed with the SEC (when available), because they will contain important information.
Investors and security holders may obtain a free copy of the solicitation/recommendation statement and other documents that PotashCorp files with the SEC (when available) through the website maintained by the SEC at www.sec.gov and through the website maintained by PotashCorp at www.potashcorp.gov. In addition, the solicitation/recommendation statement and other documents filed by PotashCorp with the SEC (when available) may be obtained from PotashCorp free of charge by directing a request to Potash Corporation of Saskatchewan Inc., 122 — 1st Avenue South, Suite 500, Saskatoon, Saskatchewan, Canada S7K 7G3, (306) 933-8500.

 

EX-99.3 4 c64453exv99w3.htm EX-99.3 exv99w3
Exhibit 99.3
(POTASHCORP LOGO)
AUG 17, 2010 ï TRANSCRIPT
Investor Presentation with Management — Webcast
Operator:
Good day, ladies and gentlemen. Thank you for standing by. Welcome to the PotashCorp special announcement conference call.
At this time all call-in participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. (Operator Instructions) I would like to remind everyone that this conference is being recorded on Tuesday, August 17, at 8.30 a.m. Eastern time.
I will now turn the conference over to Denita Stann, Senior Director, Investor Relations. Please go ahead.
Denita Stann — Potash Corporation of Saskatchewan Inc. — Senior Director, IR:
Good morning. Thank you for joining us on such short notice. In the room with us today we have Bill Doyle, our President and Chief Executive Officer; Wayne Brownlee, our Executive Vice President and Chief Financial Officer; and Joe Podwika, Senior Vice President, General Counsel, and Secretary.
I would like to remind everyone that today’s call may include forward-looking statements. Such forward-looking statements are given as of the date of this call and involve risks and uncertainties. A number of factors and assumptions were applied in the formulation of such a statement and actual results could differ materially.
For additional information with respect to forward-looking statements, factors, and assumptions we direct you to our news release and our most recent Form 10-K. You may also find on our website a reconciliation of certain non-GAAP financial measures to the most directly comparable GAAP measures. We have posted a slide presentation on our website at www.PotashCorp.com which we will be referencing during this presentation.
I will now turn the call over to Bill Doyle and Wayne Brownlee for some comments and then we will go to questions.
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
Denita, thank you. And good morning, everyone, and thank you for joining us today. Let me began on slide four.
As you saw in the press release we issued earlier this morning, PotashCorp’s Board of Directors has received and unanimously rejected an unsolicited proposal from BHP Billiton to enter into a transaction under which BHP would acquire PotashCorp for $130 per share in cash. PotashCorp’s Board thoroughly reviewed BHP’s unsolicited proposal with the assistance of its independent
     
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financial and legal advisers. Together we concluded that the BHP proposal grossly undervalues PotashCorp and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects. Accordingly, the Board determined that it is not in the best interest of PotashCorp’s shareholders for PotashCorp to enter into discussions with BHP.
By way of background let me spend a minute outlining how we got to where we are today. Included in the press release we issued this morning was a letter we sent to the chairman of BHP. Our letter was in response to a proposal made by BHP on August 12.
Following its comprehensive review of the proposal, the Board decided that the opportunistic timing of BHP’s approach and the grossly inadequate offer price did not provide a constructive basis for negotiation. In the interest of transparency we believe it is critical for our shareholders to be aware of this aggressive attempt to acquire PotashCorp for significantly less than its intrinsic value. Therefore, we made the determination to proactively disclose the details.
Now turning to slide five, I would like to take a few minutes to explain how our Board came to the conclusion to reject BHP’s proposal. There are several key reasons that influence the Board’s unanimous conclusion. To begin, BHP’s proposal fails to reflect PotashCorp’s prospects for continued growth in shareholder value creation.
As we have for the last two decades, our Board and management team are working diligently to position the Company for continued and even greater success. Following the global downturn we believe we are on the verge of an inflection point where potash demand is expected to return to historical trendline growth with tightened supply and improved pricing. PotashCorp is poised to deliver strong earnings growth as agricultural fundamentals continue to strengthen and demand for our products, and potash in particular, is on the rise.
We have and continue to make strategic investments in potash capacity which we believe uniquely position us to capture a disproportionate share of demand growth. We are, simply put, a uniquely valuable asset. We are the premier global producer with unparalleled potash assets in an industry characterized by substantial barriers to entry, few producers, and no known product substitutes. It’s an enviable position to be in and we have taken steps to become even stronger.
We have also continued to make strategic equity investments in important regions like China, Chile, Jordan, and Israel. There is no question that we have an unmatched ability to meet the needs of North American customers as well as those of growing offshore potash markets.
Let’s turn now to slide six. Of course, valuation is a major factor the Board considered. The Board determined that the proposal is grossly inadequate as it fails to reflect the strategic importance, scarcity value, and quality of PotashCorp’s assets and competencies. In short, the value proposed by BHP does not even come close to reflecting the intrinsic value of PotashCorp.
Clearly, there is strong and tangible interest in the current value and tremendous growth potential in our industry. Recent consolidation activity as well as other potential transactions, such as Agrium’s bid two days ago for AWB in Australia, demonstrate the opportunity that major industry players see in the agricultural space and are anxious to capitalize on.
BHP’s proposed premium is only 16% over PotashCorp’s August 16, 2010, closing stock price. Importantly, we believed this premium is particularly low given that our stock price does not adequately reflect our business fundamentals which are just emerging from the recent downturn.
     
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Furthermore, BHP is attempting to transfer the value inherent in PotashCorp to its shareholders at the expense of our own shareholders.
We believe the timing of the BHP proposal is highly opportunistic and is an ill-disguised attempt to exploit an anomaly in the equity market valuation of PotashCorp. In fact, we believe that BHP intentionally launched its proposal just as the fertilizer industry is emerging from an unprecedented demand decline associated with the severe global downturn in order to seize the value that PotashCorp is poised to create.
Finally, we are confident that given the demand growth and gross margin potential anticipated in the months and years ahead the BHP proposal would deliver substantially less value to PotashCorp’s shareholders than the continued execution of our strategic plan.
Now I would like to begin discussing some of the key factors supporting the Board’s rejection. As we discussed on our second-quarter earnings call a few weeks ago, our results demonstrated that rising global demand for food is creating a strong operating environment for the fertilizer industry. The increase in food consumption is illustrated on slide eight.
Tight grain and oilseed inventories along with supportive prices for crop commodities led farmers in most growing regions to pursue the economic opportunity that comes with increased production and return to the practice of replenishing essential nutrients in their soils. Volumes for our core nutrient were nearly five times the level they were in the same quarter last year as almost every major potash market moved closer to historical consumption patterns.
The unique potential of PotashCorp is re-emerging. We are beginning to see gross margin improvements and increased contributions from our equity investments in other global potash producers. We believe a strong foundation has been re-established and that fertilizer buyers and food producers around the world are preparing to take on the significant challenge of meeting food demand in the months and years ahead.
With these early results and the science of soil fertility as our foundation, we believe these trends will translate to our bottom line.
As you will see on slides nine and 10, global grain inventories remain historically low resulting in crop prices well above historical averages. This provides a clear incentive for farmers to maximize crop production and fertilizer usage which improves demand for our products. Even with the potential for a record crop in the United States the corn stocks to use ratio is projected to be at its lowest level in seven years.
Pressure on global supply has driven up future prices for corn, soybeans, and wheat by 10% to 40% since the end of the second quarter, further improving farm economics from already supportive levels. In this environment farmer returns are expected to be near record levels. As you will see on slide 11, North American corn farmers are anticipating their second-highest annual returns since 2007 with many crops in other regions also expected to approach historical highs.
We believe that no other company is better positioned to capitalize on these growth opportunities. With our world-class assets and unmatched earnings growth potential we are confident that PotashCorp can deliver significantly greater value to its shareholders than BHP’s inadequate proposal.
     
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Indications strongly point to the fertilizer market, and in particular potash, being on the verge of an inflection point that will trigger a powerful period of growth. Slide 12 shows rising crop prices, improving producer shipments, and falling potash inventories clearly demonstrating that we have turned the corner. We believe this is a precursor to improved supply/demand dynamics that are expected to again challenge producers to keep up with farmer needs.
Turning now to slide 13, you can see that 2009 was atypical for our business with our customers on the sidelines like other consumers around the world. But in the food production business you can’t stay on the sidelines for long. The scientific need for our products, particularly potash, which is known as the quality nutrient, cannot be denied.
2010 is a recovery year for us and we expect global potash consumption will reach approximately 50 million tonnes, a significant rebound from less than 30 million tonnes in 2009. Keep in mind we believe this level of demand will be reached without the full engagement of China which has been hindered by weather this spring. With pressure on crop production leading to significant imports of soybeans and the first meaningful imports of corn since 1996, we anticipate that China’s consumption will return to historical levels by 2011.
With all key markets reengaged, we expect that demand will return to the historical trend of at least 55 million tonnes in 2011 and that does not factor in the necessary restocking of the global supply chain. If the appetite for restocking returns, this estimate could be low as the distribution chain is at least 5 million tonnes light.
The BHP offer is timed at a point when our stock price did not reflect the inherent value of our business and before our earnings begin to fully reflect the upswing we are seeing in global potash shipments. Let’s turn now to slide 14.
With demand returning to the historical trend line in 2011, potash operating rates are expected to rise and with that we anticipate an improved pricing environment. With limits on other competitors’ capabilities, we expect there will be demand for our potash expansions. This means more tonnes to serve our customers in a better pricing environment.
Slide 15 illustrates that we have made and continue to make investments to capture the opportunity that lies ahead. Our commitment to expanding our capabilities is unmatched in the industry and provides tremendous future value for our shareholders. With 3.5 million tonnes of operating capability that has already been paid for and another 5.9 million tonnes coming down the pipe we will nearly double our operating capability between 2005 and 2015. BHP’s proposal does not appropriately compensate shareholders for the unmatched ability we have to meet the growing needs of our customers.
And now I would like to turn the call over to Wayne, who will continue our discussion. Wayne?
Wayne Brownlee — Potash Corporation of Saskatchewan Inc. — EVP & CFO:
Thanks, Bill, and good morning, everybody. As you can see on slide 16, our operational capabilities are a unique competitive differentiator making us the premier company with the greatest opportunities for earnings growth. We believe that our shareholders deserve to be adequately compensated for this position and the growth opportunity we see ahead.
     
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In addition to our own capacity in Canada, when you later in the additional opportunities we gained through our equity positions in China, Chile, Jordan, and Israel you will see that PotashCorp is positioned to capture a disproportionate share of the industry’s growth and the chart on slide 18 shows that the market value of our strategic equity investments is not reflected in our current stock price.
On slide 19 you will see that PotashCorp is uniquely valuable asset. PotashCorp is the premier global producer with unparalleled potash assets in an industry characterized by substantial barriers to entry, very few producers, and no known product substitutes. Because of its unique characteristics, including world-class potash assets, growth potential, high-quality phosphate and nitrogen operations, and an attractive portfolio of equity investments, PotashCorp should command a superior control premium.
Opportunities like PotashCorp are few and far between. If you go to slide 20, I want to read you a quote by BHP’s CEO who said — We should step back to our strategy that says we really only want a very large, low-cost, export-oriented business and then only on certain products. If we pass all the things in the market through that set of filters, really you will find that there is not that many of these types of assets that we want trades on.
BHP was also quoted as saying opportunities to acquire Tier 1 assets in low-risk regions, well positioned to serve the Asian markets do not come around very often. You can see on slide 21 PotashCorp is one of only two widely held potash companies in the world, and if you add in the additional criteria of being low cost we are the only door into the potash space.
Turning now to slide 22, PotashCorp is the number one producer of potash in the world with 20% of the world’s capacity at our operations in Canada, a region widely considered to be one of the most politically stable in the world. People often underestimate the value of operating in such an environment and it’s hard to put a price tag on that.
Another unique feature is the barriers to entry in potash. There are only 12 countries that produce potash. The construction of a greenfield mine in Saskatchewan is estimated to take, and on a very conservative basis, a minimum of seven years including ramp up. We estimate the cost, including infrastructure and potential deposit purchases, could exceed CDN 4 billion for 2 million tonnes of potash capacity. The BHP proposal fails to adequately compensate Potash shareholders for our premier position in a strategically vital industry, recognizing the scarcity of the types of assets that we have.
Slide 23 shows that our nitrogen and phosphate assets are also world-class. In fact, they are probably the most attractive of all of our competitors; our nitrogen assets in Trinidad and our high-quality permitted phosphate rock reserves in Aurora.
Slide 24 speaks about our brownfield position. While our brownfield projects are all justified under current pricing, that is not the case for greenfield opportunities. In fact, we believe potash prices would need to be roughly double current levels to provide a justifiable return for new entrant. This underscores the incredible value of our brownfield projects which can be completed at a significant discount, both time and cost, relative to greenfields. Our own shareholders deserve to realize that value and it should not be transferred to the holders of BHP.
     
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Turning to slide 25, we believe it is clear that the BHP proposal represents a wholly inadequate premium for control. At $130 per share BHP’s proposal is for a premium of only 16% relative to PotashCorp’s closing price yesterday. This implied premium does not take into consideration PotashCorp’s unique position as the premier producer of potash, an industry with great characteristics.
We have the greatest growth potential in the industry and this chart demonstrates that as compared to other marquee Canadian resource transactions the premium proposed by BHP for this high-quality asset is woefully inadequate. Again, the chart on slide 26 further illustrates that we are uniquely positioned to maximize the opportunity in our industry. While our operating rates fell to unprecedented levels during the recent global economic downturn, we are now returning to higher operating rates. In this environment we anticipate the opportunity for pricing improvements and with the greatest opportunity out of anyone in our industry to improve volumes over time we expect PotashCorp will capture the greatest benefits of any company in our sector.
Finally, turning to slide 27, you can see that our ability to capture greater volumes in an improved pricing environment is extremely powerful for PotashCorp shareholders. While this is not a forecast, it is conceivable that by 2015 if we are utilizing our full operational capability of 17 million tonnes this could exceed $10 billion EBITDA for potash alone. And this ignores the additional earnings of our phosphate and nitrogen businesses as well as the other benefits that we will get from our offshore investments in other potash businesses.
We believe that our earnings potential is unmatched within the industry and it is our shareholders who deserve to reap these rewards. I will now turn it back to Bill.
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
All right, thanks, Wayne. Before opening up the call to take your questions let me briefly recap. In closing, I hope you can now appreciate that our Board carefully and thoroughly considered the BHP proposal. For all of the reasons we have reviewed on the call this morning our Board determined it is grossly inadequate.
We have outstanding prospects for continued growth and shareholder value creation. PotashCorp is a unique asset and we firmly believe at the Company’s intrinsic value is far greater than the value proposed by BHP.
Thank you for joining us on the call this morning and for your interest in our company. I will now turn the call over to the operator who will take the questions as time permits.
Operator:
(Operator Instructions) Vincent Andrews, Morgan Stanley.
     
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Vincent Andrews — Morgan Stanley — Analyst:
Thank you and good morning, everyone. I guess a couple of quick questions. The first would be what would it take to get you to enter into discussions with BHP?
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
All right, Vincent, what I would tell you is we won’t speculate on a price. I can tell you we are simply looking after the best interests of our shareholders.
Operator:
Jeff Zekauskas, JPMorgan.
Jeff Zekauskas — JPMorgan — Analyst:
Good morning. In your press release pertaining to a shareholder rights plan you put the plan in place so that you might have sufficient time to develop alternatives to enhance shareholder value including competing transactions that might emerge. Does competing transactions that might emerge include transactions in which Potash might buy another company in order to enhance shareholder value?
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
Well, I can tell you we are always looking for ways to enhance shareholder value. There is no question about that. The shareholder rights plan, we are very well advised and what I would say is the rights plan is a very prudent course to protect our shareholders.
Operator:
PJ Juvekar, Citi.
PJ Juvekar — Citi — Analyst:
Good morning, Bill. This deal has been talked about for a long time. So do you think the Jansen mine was more of a smokescreen to get ready for this bid? And given this offer, do you think the Jansen project goes ahead?
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
PJ, what I would say is I do think the Jansen project has been a smokescreen, a charade so to speak, and we have talked about this in the past. We have talked about it on previous quarterly calls when I was asked. I think you asked a question six months ago, PJ. We clearly saw through it and we think now that our shareholders will see through it as well.
     
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Operator:
Mark Gulley, Soleil Securities.
Mark Gulley — Soleil Securities — Analyst:
Good morning, Bill. I am kind of wondering whether or not you are at a point yet where you are considering forming a special committee of the Board of Directors to handle this matter on a go-forward basis.
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
You know, Mark, we will determine that at the appropriate time.
Operator:
Edlain Rodriguez, Gleacher & Co.
Edlain Rodriguez — Gleacher & Company — Analyst:
So was this the first time that BHP approached you, because going back to the end of 2008, 2009 did they ever approach you at that time?
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
Good morning, Edlain. This was the first time. We met last week. We received, obviously, their written proposal at that time which we immediately took to the Board and we have made our comments on it well-known this morning.
Operator:
David Silver, Bank of America Merrill Lynch.
David Silver — Bank of America Merrill Lynch — Analyst:
Good morning. My question would be related to I guess the other stakeholders that might be — have an interest here. So can you discuss what the provincial government’s interests might be here and whether they have a say or they have influence in situations such as this? And if BHP’s bid was unsolicited does that mean that they likely did not discuss it or get any kind of approvals or understandings from the provincial government or any other stakeholders that you think are relevant in this type of situation? Thank you.
     
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Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
David, you know, we really can’t say what BHP did or didn’t do. I hesitate to speculate on what the government might do. I can assure you the government would be an interested party. That I know for sure.
Operator:
Catharine Sterritt, Scotia Capital.
Catharine Sterritt — Scotia Capital — Analyst:
Good morning. I wondered if you could expand upon your decision to disclose the proposal. It didn’t appear as if at this stage that BHP had given any indication that they might go directly to the shareholders with a bid but you chose not to try and negotiate with them.
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
Yes, Catharine, what I would say is we are a very well-known company for transparency. And in the interest of transparency and after very careful consideration our Board determined to proactively disclose BHP’s proposal to the shareholders. I think it’s very critical for all of our shareholders to be aware of BHP’s aggressive attempt to acquire the Company for significantly less than the intrinsic value.
Operator:
[Stephanie Lang], JPMorgan.
Unidentified Participant:
I just want to understand the dynamic here. So you were approached by BHP at $130 and do you just consider it and I would say you didn’t make — arrange a platform or anything to have some sort of formal negotiation consideration, kind of feel them out, get a sense of how much more there was in their approach?
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
What I would say is this unsolicited proposal we received so grossly undervalues the Company — I mean it’s so far beyond opportunistic that it really was not a constructive basis for negotiation. We are focused on highlighting the value inherent in our company and that is it.
Operator:
Tony Robson, BMO Capital.
     
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Tony Robson — BMO Capital Markets — Analyst:
Mr. Doyle, thank you. Good morning. Given your answer in terms of the first question regarding PotashCorp’s intrinsic value, do I take it to believe that you would always see the long-term value for PotashCorp shareholders better off as it currently is rather than consider any bids being made? Thank you.
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
Tony, I am not saying that we are opposed to a sale, but what I am saying is we are opposed to a steal of the Company.
Operator:
PJ Juvekar, Citi.
PJ Juvekar — Citi — Analyst:
Quickly, you said that the current price of the replacement value or replacement cost price is close to double the current price, so I am just trying to understand. That would put that price close to $700 which seems a little higher than what you said previously. Is that correct?
Also what is the construction cost per ton for a mine like that?
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
PJ, I am going to ask Wayne to take that question.
Wayne Brownlee — Potash Corporation of Saskatchewan Inc. — EVP & CFO:
Well, I think that we have shown and I would refer people to our presentation in New York in May when we talked about different pricing thresholds that would be required to justify a greenfield project. Of course, it depends on your various economic assumptions.
But I think that you can say that we came to the conclusion in New York and we remain of that view that under current pricing that greenfield is not a viable proposition. We were quite clear with that to the investment community and I think that you can take from BHP’s actions over the last week that they have reached the same conclusion.
Denita Stann — Potash Corporation of Saskatchewan Inc. — Senior Director, IR:
We will have time for just one more call at this point.
     
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Operator:
Duncan McKeen, Macquarie Capital.
Duncan McKeen — Macquarie Research — Analyst:
I think my question has been partly answered, but I just — I see a lot of similarities actually between potash and, say, uranium where uranium is also controlled from Western Canada. You have got Cameco kind of positioned similar to yourselves within the market.
What I am asking is would the Canadian government actually allow a take out of PotashCorp? Because I know in the case of Cameco foreign ownership is restricted to 15%. Just wondered if you could comment on that, thanks.
Bill Doyle — Potash Corporation of Saskatchewan Inc. — President & CEO:
I really can’t speak to what the government might or might not do. I am not privy to their thought process, but we know what we are going to do and that is where we focused. So thanks very much.
Denita Stann — Potash Corporation of Saskatchewan Inc. — Senior Director, IR:
Thank you all for joining us on the call today.
Operator:
Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. Please disconnect your lines.
     
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Important Information
This transcript is neither an offer to purchase nor the solicitation of an offer to sell any securities. PotashCorp will file a solicitation/recommendation statement on Schedule 14D-9 with the Securities and Exchange Commission (the “SEC”) within 10 business days following the commencement of an offer to purchase. Investors and security holders of PotashCorp are urged to read the solicitation/recommendation statement and any other relevant documents filed with the SEC (when available), because they will contain important information.
Investors and security holders may obtain a free copy of the solicitation/recommendation statement and other documents that PotashCorp files with the SEC (when available) through the website maintained by the SEC at www.sec.gov and through the website maintained by PotashCorp at www.potashcorp.gov. In addition, the solicitation/recommendation statement and other documents filed by PotashCorp with the SEC (when available) may be obtained from PotashCorp free of charge by directing a request to Potash Corporation of Saskatchewan Inc., 122 — 1st Avenue South, Suite 500, Saskatoon, Saskatchewan, Canada S7K 7G3, (306) 933-8500.

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