Fertilizer maker Potash Corp. announced plans to launch a stock buyback worth up to $2 billion, after Anglo-Australian miner BHP Billiton scrapped its $39 billion hostile takeover bid.
BHP, the world's largest miner terminated its unsolicited offer Sunday, after the bid failed to win clearance from the Canadian government.
Potash Corp., had rejected BHP's $130-a-share offer as "grossly inadequate," sparking the biggest takeover battle of the year.
Monday shares of the world's largest fertilizer maker closed down 1.9 percent, or $2.64, to $134.63 in New York — the lowest close in the last three months — amid a broader sell-off in commodity stocks.
Potash Corp. shares pared losses in trade after the closing bell, following the announcement of the share buyback.
The company's shares closed at a 52-week high of $153.29 in August on the NYSE.
Analysts cheered Potash Corp.'s move, which based on its current share price could result in the company repurchasing roughly 14.5 million shares, or 5 percent of its outstanding free float.
"This gives shareholders that may want to exit the stock, an opportunity to do so," said Mark Gulley an analyst with Soleil Securities.
Saskatchewan-based Potash Corp., which is the world's top producer of its namesake crop nutrient, said the buyback program will commence on Nov. 18 and run for a year.
However, the company said it intends to wrap up the share buyback program this year, if market conditions are favorable.
BHP also opted to revive its own $4.2 billion share buyback program Sunday, after terminating its offer for Potash Corp.
The collapse of the Potash Corp. bid marked the third failed deal for BHP and its Chief Executive Marius Kloppers. BHP was forced to scrap an iron ore joint venture with rival Rio Tinto a month ago after running into competition concerns in Europe, Australia and Asia. It also abandoned a full takeover of Rio Tinto in 2008.
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