Potashcorp withdraws K+S proposal due to 'challenging macroeconomic conditions'
Potashcorp's spring proposal to combine with K+S was withdrawn today because of poor market conditions.
Potashcorp stock jumped at the news, trading up 2.2% to $20.96 a share. The company has been trading down all year and has lost 36% year to date.
K+S spurred Potashcorp's spring offer arguing that the initial Cdn$10.9 billion takeover offer was too low and not in its interest.
Potashcorp acknowledged lack of cooperation with K+S as another reason to cancel the bid.
“Our proposal reflected full and fair value, and was predicated on a collaborative process with access to customary due diligence,” said Jochen Tilk, PotashCorp President and CEO.
“Since that time, challenging macroeconomic conditions have contributed to a significant decline of global commodity and equity markets, with potash peer stocks down almost 40 percent*. In light of these market conditions and a lack of engagement by K+S management, we have concluded that continued pursuit of a combination is no longer in the best interests of our shareholders.”
Potashcorp says it is recommitted to organic growth.