Western Potash on the rise after rumours of Indian interest
Renewed takeover talk and positive comments from an analyst saw Western Potash (TSX:WPX), the company behind the $3 billion Milestone project, jump 13% on Monday.
Today’s big jump came after a sharp decline early last week when the company announced a Chinese investment that disappointed investors in size and scope.
The company confirmed long-circulating rumours about a deal with a C$32 million equity investment from China BlueChemical, a unit of energy giant CNOOC, but traders were hoping for something sweeter, or even a takeover deal.
Fundamental Research Corp. expressed optimism over the Chinese investment in a report last week, calling it “a tremendous vote of confidence for the Milestone project.” It also says the investment will help Western Potash secure additional funding and possibly other partners for the project.
Stock-trading chat-rooms were buzzing with rumours over the possibility of a counter offer on the Chinese investment with India’s Rashtriya Chemicals and Fertilizers cited as potentially interested.
Rashtriya made moves towards an offtake agreement with a Western Potash peer Encanto Potash (TSX-V:EPO) earlier this year.
Creative Commons image by Ben Sutherland