The complaint, which seeks to recover damages on behalf of all holders of Potash common stock on August 17, 2010, alleges that in early August 2010, BHP attempted to engage the Potash Board in discussions concerning a potential acquisition of Potash by BHP and that on or about August 13, 2010, BHP made a written proposal to purchase Potash for US$130 per share in cash. The complaint also alleges that after the Board refused to consider BHP's non-coercive, premium offer in good faith, the Board adopted a shareholders rights plan known as a poison pill (the "Poison Pill"), that would act to dilute Potash's equity, to entrench incumbent directors and management of Potash and prevent BHP from acquiring the Company without the consent of the Board. The complaint asserts that the Poison Pill prevents Potash shareholders from freely considering BHP's or any other takeover offer and that the Tender Offer to purchase all of the outstanding common shares of Potash for US$130 per share commenced by BHP on August 20, 2010 is conditioned on the inapplicability and redemption of the Poison Pill.
According to the complaint, in an attempt to defeat shareholder support for the Tender Offer, the defendants, on August 23, 2010, issued a materially false and misleading Solicitation/Recommendation Statement on Schedule 14D-9. The 14D-9, which recommends that Potash shareholders reject the Tender Offer and not tender their shares, omits and/or misrepresents material information about, among other things, the Poison Pill and its purpose, analysis of the BHP offer price, analysis of Potash and strategic alternatives, the financial analysis by Potash's financial advisors and the standards used to conclude that the Tender Offer was "inadequate, from a financial point of view," and the Board's self-interested reasons for rebuffing BHP.
