BHP bid for Potash gets green light in Canada
Tuesday 05 October 2010
BHP Billiton's $39bn (£24.5bn) hostile bid for PotashCorp of Saskatchewan took another twist yesterday when an influential body investigating the economic implications of any takeover said that an agreement with the mining giant would be more beneficial to the province than a deal with rival suitor, China's Sinochem.
The Conference Board of Canada said that while a takeover of PotashCorp by the world's biggest mining company could lead to a C$2bn fall in provincial revenues over the next 10 years, "because BHP needs to produce an economic return, the way BHP would put capacity in place and run the operation is much more aligned to the province's interest".
Saskatchewan's Energy and Resources Minister Bill Boyd admitted that the potential revenue hit was "concerning," adding that altering the royalty structure to offset the loss would be bad for the industry and hurt other potash players. "There are both pluses and minuses to this BHP bid," Mr Boyd said in a statement.
Despite the mixed response to BHP's bid, the board suggested that any rival offer from China's state-owned chemicals group Sinochem would present, "a riskier scenario for the province," because of the Chinese group's, "state-owned and consumer-led orientation."
The Beijing government, worried about BHP taking a dominate role in the potash market, has ordered Sinochem to investigate ways of blocking the bid, possibly by taking a minority stake of its own. In recent weeks, Sinochem has emerged as the only serious rival to BHP, but so far has been unable to put a rival deal together.
The board's reaction to the possibility of a deal with Sinochem will come as a blow to PotashCorp, which has accused BHP of trying to "steal" the company with its $130-a-share offer.
The Anglo-Australian mining company has refused to rule out an increased offer but, speaking in August, its chief executive Marius Kloppers, said: "I have only seen one bid, our bid. An interloper may emerge, but we are the only game in town at this stage. It is an all-cash bid with as few pre-conditions as possible and our focus is on completing a great deal for shareholders, ours and theirs."
In a statement yesterday, a BHP spokesman said: "BHP Billiton will be studying the contents of the report of the Conference Board of Canada (CBOC) regarding the acquisition of PotashCorp. Company officials were invited to participate in the CBOC's deliberations and BHP Billiton welcomes this examination of the potash sector and its potential.
"We believe our offer for the acquisition of PotashCorp will bring significant net benefits to Saskatchewan and to Canada."
A PotashCorp spokesman said that the group was considering the recommendations.
- 1 Gwyneth Paltrow and Chris Martin file for divorce after 10 years of marriage
- 2 Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
- 4 Bookies now say Ed Miliband is more likely to be prime minister than David Cameron
Gwyneth Paltrow and Chris Martin file for divorce after 10 years of marriage
Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
Katie Hopkins and The Sun editor David Dinsmore reported to police for incitement to racial hatred following migrant boat column
'Jihadi John': Isis executioner Mohammed Emwazi wanted to wage jihad in Somalia until his friends were betrayed and killed by al-Shabaab
Parma, Missouri: 80 per cent of town's police quit after first black mayor is elected
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
Katie Hopkins on LBC: Listen to caller taking The Sun columnist to task over migrant comments
iJobs Money & Business
£12000 - £15000 per annum: Recruitment Genius: An expanding Insurance Brokerag...
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...