K+S says survey of retail shareholders shows most against PotashCorp offer

CALGARY – German fertilizer company K+S AG says its retail shareholders are against a multibillion-dollar takeover offer from Potash Corporation of Saskatchewan Inc.

A survey of the company’s retail, or non-institutional, shareholders released by K+S on Monday showed that 84 per cent of respondents were against PotashCorp’s current proposal.

PotashCorp (TSX:POT) is offering 41 euros a share for the company, valuing it at about 7.9 billion euros or C$11.3 billion.

K+S says 39,000 retail shareholders or about 28 per cent of the total participated in the survey. Retail shareholders account for about 30 per cent of all outstanding shares.

The survey also showed 28 per cent of retail investors would accept a significantly higher takeover offer, while only four per cent would accept the 41 euro per share offer.

“Our private shareholders have made their position clear,” stated K+S chief executive Norbert Steiner.

“They share the assessment of the K+S board of executive directors and supervisory board that the current PotashCorp proposal fails to reflect the fundamental value of K+S.”

K+S chief financial officer Burkhard Lohr said the “overwhelming majority” of institutional investors the company has spoken with are also against the current offer.

But in a note Scotiabank analyst Ben Isaacson raised doubts about the K+S assertions. He described the survey as based on a “minority of a minority,” representing an estimated 8.4 per cent of outstanding shares.

And he said he’s received a different message from institutional shareholders so far.

“Based on feedback from K+S institutional holders, we think the results would be quite different,” wrote Isaacson.

“We can’t see why any institutional K+S shareholder would not jump at the opportunity to cash in” at the offer price.

He said for PotashCorp to preserve shareholder value it should not raise its offer and will need to take its bid directly to shareholders.

Last week PotashCorp sent a letter to K+S offering the same share price as in earlier offers but with more guarantees on jobs and mine operations. The K+S board rejected that offer.

A spokesperson for PotashCorp declined to comment.