BHP’s botched bid for Potash

BHP won’t buy POT anymore because Potash is fairly priced. The CEO is just saying he’s going to use restraint in order to save face. If BHP was smart, they would have given a fair bid, instead of a lowball bid. That awoke other interested parties to Potash’s (under)value. I used the Agricultural Commodities historical data to shed some light on the Potash-mania.

I charted POT against Agricultural Commodities. The 6 month chart tells a good story:

http://www.hiddenlevers.com/hl/u?cdf2F6

Look how poorly POT was doing against its economic backdrop. BHP saw this, and the second it put a bid in, POT rocketed up to reflect the move in underlying commodities since July. The trend in Agro Commodities seems to be pointing up, so you know why Potash would decline BHP’s offer.

Published by

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s