Potash Corporation, the Canadian fertilizer company that is the world’s biggest producer of potash, wants to block Australian mega-miner BHP Billiton from a $40 billion hostile takeover. MiningWeekly has more:
Potash Corporation of Saskatchewan has filed a complaint in a US district court, in an attempt to block BHP Billiton’s hostile $40-billion offer for the company. The offer was “built upon false and misleading statements and omissions”, Potash Corp said in a document filed with the SEC on Wednesday. BHP has tried to buy Potash Corp “on the cheap by making its offer in an unusually coercive form”, the company said. “Shareholders lack clear and accurate information about BHP’s intentions and the true value” of Potash Corp shares, it added.
“BHP has also made false and misleading statements regarding its plans for how it will run PCS if it acquires control, whether it will develop its Jansen greenfield project, whether it will participate in the Canpotex joint export venture, and whether it will sell PCS’s nitrogen and phosphates businesses,” Potash Corp alleges.
“Each of these is a critical consideration for PCS shareholders threatened with the prospect of becoming minority shareholders in a BHP-controlled entity because BHP can complete the tender offer by acquiring just over 50% of the shares.”
There’s a vulture waiting in the wings of this deal, and that’s Chinese trading giant Sinochem. From Reuters:
China’s Sinochem Corp has hired investment banks to look at toppling BHP Billiton’s $39 billion bid for Potash Corp, sources said, as the miner warned it would not be caught in an expensive bidding war for the world’s largest fertilizer group.
State-owned chemicals group Sinochem has hired Deutsche Bank and Citigroup to evaluate measures to foil BHP’s bid for Potash, sources with direct knowledge of the matter told Reuters. The sources were not authorized to speak publicly on the matter.
To add some political hues to the deal, a BHP buy could break up the Canadian potash cartel (yes, your heard right) called Canpotex. Again from Reuters:
(BHP Chief Executive Marius) Kloppers…said BHP was sticking with its plan to drop out of the Canpotex potash marketing cartel — effectively triggering its demise — if BHP’s bid succeeds….Canpotex…accounts for a third of global potash exports and has helped buoy prices for years. Potash Corp is one of three Canpotex members.
Breaking up the cartel could negatively affect miners working in Potash Corp’s home province of Saskatchewan.