Potash said today it filed a lawsuit against BHP Billiton that seeks to block the mining giant's $39 billion hostile bid for the Canadian fertiliser producer.
The lawsuit filed in the United States alleges that BHP misrepresented and failed to inform investors about material facts, and it accuses BHP of engaging in fraudulent, deceptive and manipulative acts.
A BHP spokesman declined comment.
Potash claims that BHP sought to drive down the Canadian company's perceived value by strategically timing announcements about becoming a direct competitor in the potash business. That way, the suit argues, BHP could eventually make a bid for Potash that was low enough to avoid triggering a BHP shareholder vote.
Before bidding for Potash last month, BHP was focused on developing its Jansen potash project in Saskatchewan. The project, which is slated to begin production sometime around 2015, is expected to be the world's single largest potash mine and produce 8 million tonnes of the crop nutrient annually, once it completes a multi-year ramp-up process.
Under British law a shareholder vote is required if a company makes a takeover offer that exceeds 25 per cent of its own market valuation.
At $39 billion, or $130 a share, BHP's current offer allows it to avoid a vote that would give its own shareholders an opportunity to scupper a deal.
Reuters