ITS BEEN A LONG WAIT, BUT WORTH IT!!!!!!!!!!!!!
The world's largest salt producer, Germany's K+S Aktiengesellschaft has made a friendly all-cash Cdn$434 million (US$337.5mn) bid for Potash One, a Robert Friedland company.
Vancouver-based Potash One holds several potash exploration licenses in Saskatchewan, including the advance greenfield development, the Legacy Mine, a proposed solution potash operation.
Half of K+S revenue is from potash and magnesium products. The company is one of the world's largest fertilizer manufacturers and has projected revenues of €4.8 billion to €5 billion this year. Adjusted earnings between January and September of this year were reported at €313.7 million or €1.64 per share.
North Americans may be familiar with the K+S subsidiary Morton Salt while South Americans may know of the company's Sociedad Punta de Lobos (SPL) business. The Kassel, Germany-based K+S's roots go back to 1889.
K+S estimated a production capacity of up to 2.7 million tonnes of potassium chloride annually at Potash One's Legacy. The US$2.5 billion capex project is believed to contain reserves capable of supporting 2.86 million tonnes of annual potash production for 47 years.
Legacy is believed to have proven and probable reserves of 135.8 million tonnes of recoverable KCl product, as well as an indicated resources of 80.1 million tonnes of recoverable KCl product,
The Legacy Project is adjacent to the world's largest producing potash solution mine, Mosaic's Belle Plaine. Legacy production start-up is planned for late 2014.
Potash One CEO Paul Matsek said, "K+S is a highly qualified global leader with over 100 years of experience in the potash industry and a market capitalization of close to EUR 10 billion (USD 13 billion); they have the technical and operational depth and the proven marketing and sales expertise to successfully bring Legacy forward."
The transaction is not subject to the "net benefit to Canada" review under the Investment Canada Act, which stymied BHP Billiton's now aborted takeover bid for Potash Corporation of Saskatchewan.
The K+S takeover bid for Potash One is expected to close in the first quarter of 2011. The directors and officers of Potash One will enter into lock-up agreements with K+S to tender 21% of Potash One shares to the offer at a price of C$4.50 per share.
If the transaction is not completed due to a superior proposal for Potash One, the junior company will have to pay K+S a termination fee of C$16.5 million. As a condition of the support agreement, an affiliate of K+S has been subscribed for C$30 million convertible secured debenture from Potash One., which will be used to fund immediate water infrastructure commitments related to the Legacy Project.
K+S Chairman Norbert Steiner said the company's offer for Potash One "complements our growth strategy to expand our potash capacities and our average mine life. Furthermore, the new potash assets together with our existing domestic potash sites will enhance our international competitiveness and as a result strengthen the K+S Group overall, in Europe as well as overseas." Currently K+S has Canadian Salt operations throughout Canada including Regina, Saskatchewan.
