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 Artist Jamie McCartney: How The Great Wall of Vagina is a stand against 'body fascism'
- 2 Katie Hopkins reveals fear she will die during brain surgery to cure epilepsy
- 3 Tom Cruise: Reporters banned from asking actor about Scientology
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 Michael B Jordan and Kate Mara handle excruciatingly awkward and offensive interview questions like pros
RideLondon 2015: Cyclist dies while climbing highest hill in Surrey during sportive
Katie Hopkins reveals fear she will die during brain surgery to cure epilepsy
'Gene drive': Scientists sound alarm over supercharged GM organisms which could spread in the wild and cause environmental disasters
Dutch King Willem-Alexander declares the end of the welfare state
Tom Cruise: Reporters banned from asking actor about Scientology
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...
£11000 - £50000 per annum: Recruitment Genius: This financial company offer ma...
competitive + incentives + uncapped comms: SThree: Did you know? 98% of our di...