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Will BHP Billiton Win Potash?

Potash Corp. spurns BHP Billiton's $38.6 billion takeover bid, but many think a deal remains highly likely. Take our poll to see what 'TheStreet' thinks about the red-hot fertilizer sector.
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(Potash-BHP poll updated with latest developments in the takeover saga.)



) --

BHP Billiton

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is considered one of the savviest and most dogged corporate behemoths in the world.

No surprise, then, that the mining colossus has "gone hostile," as they say in the deal field, bypassing

Potash Corp.'s


board and

making its appeal

directly to shareholders as it attempts to acquire the fertilizer giant for $130 a share, or $38.6 billion.

BHP made the announcement of its hostile intent on Wednesday.

On Tuesday, Potash Corp. of Saskatchewan, its directors and management having judged BHP's unsolicited bid

to be "grossly inadequate

," has expressed its desire to remain independent -- for the time being, at least.

It's a phrase -- grossly inadequate, that is -- that the company bandied about a lot on Tuesday, after disclosing BHP's initial proposal to the markets and convening a conference call with analysts and investors to discuss its rejection of the Aussie miner's advances.

Some industry observers feel a deal is "very, very likely," as Anthony Rizzuto, a stock analyst who covers BHP for Dahlman Rose in New York, said on Tuesday.

BHP-Potash Poll

Click here for our poll on BHP Billiton's bid for Potash.

Potash boss Bill Doyle, meanwhile, nodding in the direction of his fiduciary duties, said during the conference call, "I'm not saying that we are opposed to a sale, but what I am saying is we are opposed to a steal of the company."

What's the magic number that, in the minds of Potash directors and management, would transform a theft into a deal? Some believe BHP will need to offer more than $150 a share to convince its target, which would amount to at least a $44 billion buyout.

BHP, with $8.3 billion in cash on its balance sheet, would appear to have the dry powder to make such a deal. It could also raise as much as $10 billion by selling off Potash Corp.'s non-core businesses, analysts say -- the Canadian company has a big presence in phosphate and nitrogen fertilizers in addition to the potassium compound potash.. Further, BHP has apparently struck an agreement to receive a $40 billion syndicated loan from a group of six banks,


reported Wednesday.

But competition may also rear its head. BHP's Brazilian mining rival


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, after all, is on the record with its desire to expand its potash business. Further, one ought not discount the Chinese these days when it comes to making grabs for any kind of natural resource.

The market has apparently laid its bets on a sweetened offer -- and eventually a consummated deal -- judging by the 30% surge in the price of Potash shares Tuesday, more $13 above BHP's bid, though some observers feel the news-fueled spike

was overdone


And so we put it to readers of


: Will BHP eventually win out and strike a deal to acquire Potash? Take our poll below to see what


has to say.

-- Written by Scott Eden in New York

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.