BHP Billiton Canada to acquire Athabasca Potash

BHP Billiton Canada, Inc., a mineral exploration and production company, has entered into a definitive agreement to acquire all of the issued and outstanding common shares of Athabasca Potash, Inc. (API), a potash exploration and development company, at a price of CAD8.35 ($7.84) cash per common share. The total equity value of the transaction is approximately CAD341 million ($320 million) on a fully diluted basis.

The price per share represents a 25% premium over the closing price of the common shares on the Toronto Stock Exchange on January 27, 2010 and a 37% premium based on the volume weighted average price of the common shares over the 60 trading days prior to January 28, 2010. The transaction is to be implemented by way of a statutory plan of arrangement

The Board of Directors of API has unanimously approved the transaction and, having received fairness opinions from its financial advisors, recommends that security holders vote their shares in favor of the transaction. Dawn Zhou, API's Executive Chairman, all directors and certain other officers and major shareholders of API have entered into lock-up agreements with BHP Billiton under which they will irrevocably vote common shares and options representing approximately 40% of API's fully diluted outstanding common shares in favor of the transaction.

CIBC World Markets, Inc. and Genuity Capital Markets are acting as financial advisors, while Fraser Milner Casgrain LLP is acting as legal advisor to API. TD Securities, Inc. is acting financial advisor, while Fasken Martineau DuMoulin LLP is acting as legal advisor to BHP Billiton.

Deal Value (US$ Million) 320
Deal Type                Acquisition
Sub-Category             100% Acquisition
Deal Status              Announced: 2010-01-28

Deal Participants

Target (Company)   Athabasca Potash, Inc.
Acquirer (Company) BHP Billiton Canada, Inc.

Deal Rationale

The acquisition fits well with BHP's existing projects and land positions in the Saskatchewan potash basin.

Bid Premium ($ per share) 25

Related terms: acquisition, advisor, canada, equity, executive, exploration, legal, securities, security