BHP Billiton, PotashCorp await government call on takeover

03 November 2010 16:34  [Source: ICIS news]

HOUSTON (ICIS)--A group of Native American tribes said it was preparing a rival bid for PotashCorp on Wednesday as BHP Billiton waited  for Canada's government to approve or deny its attempted takeover of the fertilizer producer.

The Indigenous Potash Group of Saskatchewan is preparing a rival bid to BHP Billiton's, said group spokesman Rick Gamble.

The group's core includes five of the 24 First Nations groups, which reside in Canada’s Potash Belt, Gamble said.

The group has organised a consortium of foreign investors from China, India and Brazil, to go along with Canadian pension funds, for a bid to be filed on 18 November, he said.

Gamble said the exact amount of the bid had yet to be determined, but would be adequate to meet or exceed BHP’s current offer and subsequent increases.

The group said it would file an injunction if the BHP bid is approved by the government.

Saskatchewan premier Brad Wall told reporters on Tuesday that the province would sue the federal government if Canada approves BHP’s $39bn (€28bn) bid for PotashCorp.

Saskatchewan would lose $3bn in tax revenues over a three-year period, Wall said, adding that the government should indemnify the province against the loss.

Meanwhile, Russia’s largest potash producer, PhosAgro, and other Russian fertilizer makers were considering making a combined bid for PotashCorp on the encouragement of Russia’s Industry and Trade Ministry.

Business groups in Western Canada, particularly oil and gas interests, have voiced opposition to the takeover, believing their businesses would be vulnerable to foreign interests, according to news sources.

In Saskatchewan, the provincial Financial Services Commission (SFSC) will hear BHP’s application for a “cease trade order” of PotashCorp’s poison pill shareholders rights plan scheduled for 8 November in Regina, the provincial capital.

BHP claims the shareholders rights plan would dilute shareholder ownership positions in the event BHP acquired 20% or more of the outstanding shares of PotashCorp stock, according to SFSC documents.

Under the plan, if 20% or more of the shares are acquired by BHP, shareholders could buy additional shares at half price.

If approved, BHP was said to be preparing to sweeten its $130/share offer to win shareholder approval, with some analysts estimating a successful offer would have to top $155 a share.

UBS analysts projected Tuesday that BHP’s bid could reach as high as $165/share.

 ($1 = €0.71)

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By: Frank Zaworski
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