Potash Rejects $38.56 Billion Takeover Bid by BHP Billiton

Potash Corp. of Saskatchewan said Tuesday it has received and rejected an unsolicited $38.56 billion takeover bid from BHP Billitohammer mill for goldpage6n, saying the proposal from the cash-rich mining giant was "grossly inadequate" and not in shareholders' interests.

In response, the world biggest potash producer also adopted a shareholder rights plan to prevent anyone from building more than a 20% stake in the company. BHP Billiton offered $130 a share, a 16% premium to Potash's Monday closing price. The shares were up 19% at $133.74 in recent premarket trading. The stock through Monday had climbed 23% this year. Potash Chairman Dallas J. Howe said the offer fails to reflect the fertilizer giant's "unparalleled further growth prospects." The fertilizer industry has continued to rebound from slumping demand last year. Last month Potash reported its second-quarter profit more than doubled and boosted its 2010 earnings guidance.