Canada's PotashCorp sets terms for bidders to thwart BHP

13 October 2010 16:02  [Source: ICIS news]

TORONTO (ICIS)--Canada’s PotashCorp on Wednesday set out a “Pledge to Saskatchewan” under which it called on any bidder to commit to keeping the company’s headquarters in the province, to maintain the Canpotex export marketing consortium and to press ahead with PotashCorp’s expansion projects.

The pledge comes as PotashCorp is seeking out alternatives to BHP Billiton’s hostile $40bn (€29bn) takeover bid for the world's largest fertilizer company.

Furthermore, PotashCorp said bidders should commit to developing a strong aboriginal workforce, as well as to supporting community programmes and local purchasing.

Separately, CEO Bill Doyle said in a letter to employees that talks with potential alternative bidders were ongoing, but he did not disclose details.

Recent media reports said a Canadian pension fund had approached Singapore’s state investment agency Temasek with a view towards jointly mounting a rival bid for PotashCorp, and that China’s Sinochem was seeking Canadian government assurances before launching a bid of its own.

Earlier, an advisory report to the Saskatchewan provincial government recommended against any potential bid by Sinochem.

The report by the Conference Board of Canada said state-controlled Sinochem, as a buyer of potash, had a strong incentive for low potash prices. As such, its management of PotashCorp would not be guided by the same businesses and profit motives commercial firms typically pursue, thus hurting the province's royalty revenues from its potash resources, it said.

PotashCorp’s share was price up marginally by 0.09% at $147.30 in early morning trading in New York, at 09.58 local time. This compares with BHP’s $130/share offer from August.

($1 = €0.72)

For more on PotashCorp and other producers visit ICIS company intelligence
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By: Stefan Baumgarten
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