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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 2, 1996
(Date of earliest event reported)
POTASH CORPORATION OF SASKATCHEWAN INC.
(Exact name of registrant as specified in its charter)
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SASKATCHEWAN, CANADA 1-10351 N/A
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
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SUITE 500 122-1ST AVENUE SOUTH
SASKATOON, SASKATCHEWAN, CANADA S7K 7G3
(Address of principal executive offices, including zip code)
(306) 933-8500
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS.
On September 2, 1996, Potash Corporation of Saskatchewan Inc. (the
"Corporation") entered into a definitive merger agreement (the "Merger
Agreement") with Arcadian Corporation ("Arcadian") whereby the Corporation
agreed to acquire of all the issued and outstanding common shares of Arcadian
(approximately 45.5 million common shares on a fully diluted basis).
The foregoing is qualified by reference to the Material Change Report,
dated September 10, 1996, filed with Canadian Securities Regulators, a copy of
which is incorporated herein by reference to Exhibit (99) to this Current Report
on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
(99) Potash Corporation of Saskatchewan Inc. Material Change Report
dated September 10, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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POTASH CORPORATION OF
SASKATCHEWAN INC.
Dated: September 10, 1996 By: /s/ JOHN L.M. HAMPTON
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Name: John L.M. Hampton
Title: Senior Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
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PAPER (P) OR
EXHIBIT DESCRIPTION ELECTRONIC (E)
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(99) Potash Corporation of Saskatchewan Inc. Material Change Report
dated September 10, 1996 E
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Exhibit 99
POTASH CORPORATION OF SASKATCHEWAN INC.
MATERIAL CHANGE REPORT
FORM 25 - SECURITIES ACT, 1988 (SASKATCHEWAN)
FORM 26 - SECURITIES ACT (NEWFOUNDLAND)
FORM 27 - SECURITIES ACT (BRITISH COLUMBIA)
FORM 27 - SECURITIES ACT (ALBERTA)
FORM 27 - SECURITIES ACT (ONTARIO)
FORM 27 - SECURITIES ACT (NOVA SCOTIA)
SECURITIES ACT (QUEBEC), SECTION 73
SECURITIES ACT (MANITOBA), SECTION 112
1. REPORTING ISSUER
Potash Corporation of Saskatchewan Inc. (the "Corporation")
Suite 500, 122-1st Avenue South
Saskatoon, Saskatchewan
S7K 7G3
2. DATE OF MATERIAL CHANGE
September 2, 1996
3. PRESS RELEASE
The press release attached hereto as Schedule A was distributed
through Canada Newswire Ltd. on September 2, 1996.
4. SUMMARY OF MATERIAL CHANGE
The Corporation and Arcadian Corporation ("Arcadian") entered into a
definitive merger agreement (the "Merger Agreement") whereby the
Corporation agreed to acquire all of the issued and outstanding
common shares of Arcadian (approximately 45.5 million common shares on
a fully diluted basis).
5. FULL DESCRIPTION OF MATERIAL CHANGE
On September 2, 1996, the Corporation and Arcadian entered into the
Merger Agreement whereby the Corporation agreed to acquire all of the
issued and outstanding common shares of Arcadian (approximately 45.5
million common shares on a fully diluted basis).
The Merger Agreement provides that the holders of Arcadian common
shares shall receive for each common share of Arcadian, US$12.25 in
cash and common shares of the Corporation (the "Per Share Stock
Amount"). The Per Share Stock Amount (subject to adjustment such that
the common shares of the Corporation shall not represent less than
47.94 percent of the total merger consideration) shall be the number of
common shares of the Corporation equal to:
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(i) if the price of the Corporation's common shares based on
the average daily high and low trading prices on the New York
Stock Exchange for the twenty trading days prior to two days
before the merger date (the "Final PCS Share Price")) is at
least US$72.00 but not greater than US$83.25, then .17713;
(ii) if the Final PCS Share Price is less than US$72.00, then
the lesser of (1) .19615 and (2) the quotient of (x) US$12.75
divided by (y) the Final PCS Share Price; and
(iii) if the Final PCS Share Price is greater than $83.25,
then the greater of (1) .16389 and (2) the quotient of (x)
US$14.75 divided by (y) the Final PCS Share Price.
The Merger Agreement provides that Arcadian shall either (i) accelerate
the time at which options to acquire Arcadian common shares may be
exercised to permit the holders thereof to participate in the
transaction as holders of Arcadian common shares; or (ii) require the
surrender of all non-exercised options before or not later than 60
days after the merger date and pay to the holders thereof an amount of
cash equal to the excess of the fair market value of Arcadian common
shares subject to option over the aggregate exercise option price. The
Merger Agreement provides that certain warrants to purchase Arcadian
common shares must be exercised prior to the merger, that other
warrants will, after the merger, be exercisable for the Corporation's
common shares, and that Arcadian's outstanding Mandatorily Convertible
Preferred Stock, Series A ("Arcadian Preference Shares") will be
converted into common shares of Arcadian, prior to the merger date.
Following the acquisition (including liabilities assumed), the
projected net debt to capitalization of the Corporation will be
approximately 42 percent. To finance the cash portion of the merger
consideration, the Corporation has arranged debt financing in the
amount of US$600 million with Scotiabank on comparable terms to
existing Corporation debt.
The Merger Agreement includes certain conditions, including, among
other things, a due diligence period of fourteen days, obtaining the
usual regulatory approvals, and the expiration or termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
The Corporation or Arcadian may terminate the Merger Agreement in the
event the Final PCS Share Price is greater than US$90 or less than
US$65. The Merger Agreement shall be submitted for approval by the
holders of common shares of Arcadian and Arcadian Preference Shares at
a meeting of Arcadian called for this purpose.
The Merger Agreement generally restricts Arcadian from soliciting
competing offers and provides for the payment by Arcadian, to the
Corporation, of US$25 million upon the termination of the Merger
Agreement in certain circumstances.
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On or about September 5, 1996, two stockholders of Arcadian filed an
amended class action complaint against Arcadian, the Corporation, and
all of the members (and one former member) of Arcadian's Board of
Directors in Delaware state court. The plaintiffs allege in the
amended complaint that Arcadian's stock would be sold to the
Corporation in the proposed transaction for substantially less than its
actual value, and that the individual defendants breached their
fiduciary duties to the public Arcadian stockholders. The amended
complaint further alleges that the Corporation aided and abetted the
breaches of fiduciary duty committed by the individual defendants. The
plaintiffs seek class certification on behalf of the public
stockholders of Arcadian. The plaintiffs seek preliminary and
permanent injunctions enjoining the merger and other relief. In the
alternative, if the transaction is consummated prior to judgement, the
plaintiffs seek rescission and/or an unspecified sum of damages if
rescission is impracticable. The plaintiffs have not served the
Corporation with the amended complaint. The defendants intend to
vigorously defend the lawsuit.
The Corporation's previously announced discussions with BASF AG to
acquire from BASF, for cash, a 51% interest in the German publicly
traded company, Kali und Salz AG, continue on schedule.
6. RELIANCE ON CONFIDENTIALITY PROVISIONS OF SECURITIES LEGISLATION
Not applicable.
7. OMITTED INFORMATION
Not applicable.
8. SENIOR OFFICERS
For further information please contact John L.M. Hampton, Senior Vice
President, General Counsel and Secretary at (306) 933-8796.
9. STATEMENT OF SENIOR OFFICER
The foregoing accurately discloses the material change referred to
herein.
DATED at Saskatoon, Saskatchewan, this 10th day of September, 1996.
/s/ JOHN L.M. HAMPTON
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John L.M. Hampton, Senior Vice President,
General Counsel and Secretary
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Schedule A
Potash Corporation [LOGO]
of Saskatchewan Inc. NEWS RELEASE
FOR IMMEDIATE RELEASE
POTASH CORPORATION OF SASKATCHEWAN INC.
TO ACQUIRE ARCADIAN CORPORATION
Saskatoon, Saskatchewan and Memphis, Tennessee, September 2, 1996 -- Potash
Corporation of Saskatchewan Inc. (NYSE, TSE, ME: POT) and Arcadian Corporation
(NYSE: ACA; ACA PRA) jointly announced today that they have entered into a
definitive merger agreement. Potash Corporation of Saskatchewan Inc. (PCS) is
to acquire all the outstanding common stock of Arcadian (approximately 45.5
million shares on a fully diluted basis) at a price of U.S. $25 to U.S. $27 per
share, providing U.S. $12.25 per share in cash and the remainder in common
stock of PCS at an exchange ratio of 0.17713 shares of PCS (subject to
adjustment) for every share of Arcadian.
The merger agreement contemplates that Arcadian's outstanding shares of
Mandatorily Convertible Preferred Stock, Series A, will be converted into
shares of Arcadian common stock immediately prior to the merger date and will
be treated identically to all other shares of Arcadian common stock in the
merger. The merger agreement includes certain conditions, including, among
other things, a due diligence period of fourteen days, obtaining the usual
regulatory approvals, and the expiration or termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act. The merger will be
subject to approval by the Arcadian stockholders. The terms of the
transaction, including the offering of the PCS common stock, will be set forth
by means of a proxy statement/prospectus.
"This acquisition will once again increase the significance of PCS as a world
fertilizer supplier," stated C. E. Childers, Chairman, President and Chief
Executive Officer. "Nitrogen, the third primary nutrient will complete our
existing product portfolio of potash and phosphate, providing synergies as well
as growth opportunities. Arcadian's sales and distribution network complements
that of PCS and its addition will advance our business objectives."
William A. McMinn, Chairman of the Board of Arcadian, said: "This transaction
will result in one of the largest fertilizer companies in the world.
Arcadian's position as the largest producer and marketer of nitrogen
fertilizers in the Western Hemisphere is an ideal match for PCS's status as one
of the largest potash and phosphate producers in the world. The size and
diversity generated by this transaction creates a major force in all three of
the primary nutrients, allowing for the unique ability of the combined entity
to be a "one-stop" producer and supplier of the primary fertilizer nutrients."
Following the acquisition (including liabilities assumed), the projected net
debt to capitalization of PCS will be approximately 42 percent, which is
comparable to where it was when it entered the phosphate business eighteen
months ago. To finance the cash portion of the merger consideration, PCS has
arranged debt financing with Scotiabank on comparable terms to the existing PCS
debt.
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Childers concluded by saying, "We are looking forward to integrating Arcadian's
quality people and strong assets into the successful PCS system. We believe
this company will have even more value combined with our operations and under
our corporate philosophy. Having played an important part of the consolidation
in the potash and phosphate business we now look forward to participating in
the nitrogen arena."
The PCS discussions with BASF AG to acquire from BASF, for cash, a 51 percent
interest in the German publicly traded company, Kali und Salz AG, continue on
schedule.
Potash Corporation of Saskatchewan Inc. pulls product from eight potash mines,
three phosphate plants and seven feed plants. Arcadian Corporation has eight
production facilities producing a diversified nitrogen product mix. Following
the acquisition, the Company's production of all three basic raw materials will
make PCS the largest integrated fertilizer producer in the world.
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FOR FURTHER INFORMATION PLEASE CONTACT:
Betty-Ann Heggie John Hunt
Senior Vice President, Corporate Relations Director -- Investor Relations
Potash Corporation of Saskatchewan Inc. Arcadian Corporation
(306) 933-8521 (901) 758-5339
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FACT SHEET
ON POT/ACA AGREEMENT
Under the agreement, each Arcadian shareholder will receive $12.25 cash and
.17713 shares of PCS stock for each Arcadian share or approximately $26/share
assuming a PCS share price of 77 5/8. The .17713 share ratio of PCS to
Arcadian common stock is fixed within a PCS share price range of $72.00 to
$83.25. If PCS stock price is below $72 each Arcadian shareholder will receive
$12.75 in PCS stock and $12.25 in cash. If PCS stock price is above $83.25
each Arcadian shareholder will receive $14.75 in PCS stock and $12.25 in cash.
The share price ratios will remain fixed at .1639 in the event that PCS's stock
price exceeds $90.00 and at .1962 in the event that PCS's stock price declines
past $65.00 per share. In the event of either case occurring, either party may
terminate the transaction.
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PCS Stock Stock Total Exchange PCS Shares
Price Consid. Cash Consid. Consid. Ratio Issued (1)
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$65.00 $12.75 $12.25 $25.00 0.19615 8.93 Million
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$68.00 $12.75 $12.25 $25.00 0.18750 8.53 Million
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$72.00 $12.75 $12.25 $25.00 0.17713 8.06 Million
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$76.00 $13.46 $12.25 $25.71 0.17713 8.06 Million
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$83.25 $14.75 $12.25 $27.00 0.17713 8.06 Million
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$86.00 $14.75 $12.25 $27.00 0.17151 7.80 Million
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$90.00 $14.75 $12.25 $27.00 0.16389 7.46 Million
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(1) Based on 45.5 million ACA shares outstanding.
If the holders of Arcadian common stock would receive less than 48 percent of
the "Total Consideration" (as defined for tax purposes) in PCS shares, the
amount of shares issued will be increased and the amount of cash will be
correspondingly decreased.
