DBRS Places BHP Billiton Under Review – Developing Following Proposal to Acquire Potash Corporation

DBRS has today placed the AA (low) and R-1 (middle) ratings of BHP Billiton Ltd. and BHP Billiton plc (collectively, the Group, BHP Billiton or the Company) Under Review with Developing Implications following the Company’s confirmation that it has approached Potash Corporation of Saskatchewan Inc. (Potash) regarding a possible acquisition of Potash for cash a price of $130 per common share (approximately $38.5 billion). Potash’s board of directors has unanimously rejected the proposal and Potash has adopted a shareholder rights plan, subject to Toronto Stock Exchange acceptance.

DBRS views that BHP Billiton has the financial resources to pursue the acquisition and that Potash’s fertilizer businesses would fit within BHP Billiton’s business profile. Given the rejection of the proposal by Potash, the inability to predict the terms of a further offer and BHP Billiton’s financing structure for any further proposal it might make, DBRS is placing BHP Billiton’s ratings Under Review with Developing Implications pending further clarity on the course of its pursuit of Potash.

The final terms of any potential transaction will determine whether a DBRS rating action is warranted.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating Mining, which can be found on our website under Methodologies.