Sinochem set to gatecrash BHP's Potash takeover

Sinochem fired the opening salvo in what could escalate into a full-scale takeover battle for Potash Corporation of Saskatchewan, as the Chinese chemicals group said it was watching BHP Billiton's $38.5bn (£25bn) hostile offer for the Canadian company.

PotashCorp, the world's biggest fertiliser producer, is eager to drum up support from BHP's rivals after it rejected the Anglo-Australian miner's $130-a-share bid as "grossly inadequate" on Monday. Several investors in PotashCorp see a counter-bid from China as the most likely to succeed in trumping BHP's offer, or forcing the company to increase its bid.

A spokesman for Sinochem, Li Qiang, was quoted as saying that the state-owned Chinese company would "pay close attention" to BHP's offer, which formally went hostile yesterday. Mr Li said Sinochem was "interested in overseas potash investment opportunities" and already had a close relationship with the Canadian business.

He stopped short of commenting on the likelihood of any formal bid. PotashCorp's share price is already well above the $130 offered by BHP. Earlier this week, Daniel Bubis, the chief investment officer of Tetrem Capital Management, a Winnipeg-based PotashCorp shareholder, said another bidder, possibly from China, might emerge and that BHP may need to go as high as $170 a share.

Of Chinese investors, Mr Bubis added: "This is obviously, longer-term, an extremely important commodity for them. Their diets are changing and there are a lot of mouths to feed, and that's not going to change."

BHP declined to comment on whether it was prepared to increase its bid, arguing that its initial proposal valued PotashCorp at 20 per cent more than the group's closing price at the end of last week. Next Wednesday, when BHP announces its 2010 results, the chief executive, Marius Kloppers, is expected to concentrate on BHP's mining expertise and its already heavy presence in the Canadian potash industry. Sources close to BHP said yesterday that it offered the best deal "for jobs, for the environment and for safety".

Analysts have suggested that BHP could afford to pay as much as $60bn for PotashCorp before a deal adversely affected earnings. At present, the offer is worth about 20 per cent of the company's overall value, meaning that BHP would not be required to ask its shareholders for permission to press ahead.

Analysts reckon the miner could go as high as $154 a share before the proposed takeover became a so-called class-one deal, worth a quarter of its overall turnover, which would require shareholder backing. BHP already has financing for the deal in place. Earlier this week, it asked a syndicate of banks – Barclays Capital, BNP Paribas, JP Morgan, Royal Bank of Scotland and Santander – to arrange a $45bn loan. It is the biggest such facility since the similar-sized deal organised to support InBev's takeover of Anheuser Busch in 2008.

PotashCorp acknowledged BHP's offer yesterday but advised shareholders to take no action. The relationship between the two companies is already said to be fractious, with at least two months still to run on BHP's offer period.

News
John Moore inspired this Coca Cola Christmas advert
people

John Moore starred in Coca Cola and Morrisons adverts

News
people

Top Gear presenter is no stranger to foot-in-mouth controversy

Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films
books

New essay by JK Rowling went live on Pottermore site this morning

News
Mike Tyson has led an appalling and sad life, but are we not a country that gives second chances?
people

Former boxer recalls incident when he was seven years old

PROMOTED VIDEO
Sport
A Rutherford Raiders shirt with the PornHub sponsorship
football

Arts and Entertainment
Charlie Sheen said he would
tv

Charlie Sheen could be set to revive his role as a hedonistic womaniser

Life and Style
Jamie Oliver’s version of Jollof rice led thousands of people to post angry comments on his website
food + drink
Arts and Entertainment
glastonbury
News
Apple CEO Timothy Cook
people
News
i100
Arts and Entertainment
Vividly drawn: Timothy Spall in Mike Leigh’s ‘Mr Turner’
film

Review: Mike Leigh's biopic is a rambling, rich character study

News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Market Risk Manager - Investment Banking - Mandarin Speaker

£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...

Day In a Page

The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes