04 November 2010 15:38 [Source: ICIS news]
HOUSTON (ICIS)--Australian mining major BHP Billiton said on Thursday that it was disappointed by the Canadian government's decision to reject its $39bn (€28bn) hostile takeover bid for Saskatchewan’s PotashCorp.
In a statement, BHP said it noted the ruling that Industry Minister Tony Clement was not satisfied "at this time". BHP said it still believed its offer was of net benefit to Canada, adding that it would review its options.
Under the rules of the act, BHP has 30 days to try to change the government’s mind with a revised offer. A US investment bank said on Thursday that it believed the bid would ultimately be approved.
Meanwhile, PotashCorp maintained that the bid was too low.
“The Minister of Industry’s announcement does nothing to change our view that the BHP Billiton $130/share offer is wholly inadequate,” PotashCorp said in a statement.
“The PotashCorp board of directors strongly believes that the offer fails to reflect both the value of PotashCorp’s premier position in a strategically vital industry and the company’s future growth prospects,” the company added.
The decision of whether to allow the takeover of PotashCorp by a foreign company had become a highly politicised issue in Canada, with the Saskatchewan provincial government strongly urging the federal government to reject BHP’s bid.
"Quite unequivocally, Canada works. Canada works for the regions. In this case it has worked to a great extent for the people of the province of Saskatchewan," Wall said in a news conference.
Wall and numerous other political figures have called for a review of how Canada judges foreign takeovers. Wednesday's rejection was only the second time in 25 years that a foreign bid had been turned down under the Investment Canada Act.
Meanwhile, PhosAgro, Russia’s largest maker of phosphate fertilizers, said on Thursday that it and domestic competitors were still studying a joint bid for PotashCorp.
PhosAgro said in a statement that it was in intense consultations with the Russian government as well as local and foreign banks on a possible deal, and that it would announce its plans after 15 November.
In Canada, the Indigenous Potash Group, consisting of investors from five First Nations in Canada’s potash belt, was also considering a bid for PotashCorp.
Additional reporting by Ben DuBose
($1 = €0.71)
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