Bloomberg News

Potash Corp. Seeks Approval to Boost Israel Chemicals Stake

December 20, 2011

(Updates with closing share price in sixth paragraph.)

Dec. 19 (Bloomberg) -- Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, is seeking approval to increase its holding in Israel Chemicals Ltd. to as much as 25 percent.

Potash Corp., owner of 13.9 percent of Israel Chemicals, applied to Israel’s Ministry of Finance to raise its stake, Bill Johnson, a spokesman for the Canadian company, said today in an e-mailed statement.

“If the application is granted, it will give us one more option in our use of free cash flow when we are making investment decisions,” Johnson said. “It is not a foregone conclusion that we would acquire any additional shares, but we are seeking the flexibility.”

Potash Corp., the second-largest shareholder in Israel Chemicals, fended off a $40 billion takeover bid from BHP Billiton Ltd. last year. The Israeli company known as ICL, which extracts minerals from the Dead Sea to make fertilizer, reported an 80 percent jump in third-quarter net income after prices rose. An additional 11.1 percent stake in ICL would be valued at $1.4 billion.

“This is good news for ICL shareholders because you have a big buyer looking to buy shares,” Guil Bashan, an analyst at IBI-Israel Brokerage & Investments Ltd. in Tel Aviv, said by phone.

Shares Gain

ICL rose 2.4 percent to close at 36.70 shekels in Tel Aviv trading, valuing it at about $12.3 billion, after earlier gaining as much as 6.6 percent. Potash fell 1.4 percent to close at C$40.03 in Toronto.

Prices for potash increased in the U.S. last quarter because of rising demand for the form of potassium used by farmers to make plants more resistant to drought. Prices averaged 27 percent more in the third quarter compared with a year earlier, according to figures compiled by Bloomberg Industries. ICL derives about 19 percent of its revenue from North America.

ICL doesn’t comment on matters relating to its shareholders, the company said in a statement. Israel’s Finance Ministry spokesman Boaz Stembler earlier said that Potash Corp. was seeking to increase its holding.

Israel Corp. is the largest shareholder of ICL with a 52 percent stake, according to data compiled by Bloomberg.

--Editors: Alex Devine, Stephen Cunningham

To contact the reporters on this story: Jesse Riseborough in London at jriseborough@bloomberg.net; Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editors responsible for this story: Jonathan Ferziger at jferziger@bloomberg.net; Amanda Jordan at ajordan11@bloomberg.net


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