CANADA’S Saskatchewan province has opposed BHP Billiton’s hostile bid for Potash Corp – prompting the minering giant to offer more concessions on tax revenue to get the $39bn (£25bn) deal approved.
Canadian officials have the final decision on whether to approve the deal and some analysts said the tough line taken by Saskatchewan appeared to be part of the negotiating process.
“I think it’s wrangling rather than anything more serious. There’s a lot that BHP is willing to do in order to ensure that this deal is a success,” said Evolution analyst Charles Kernot.
The Canadian province said talks had broken down with BHP after the miner failed to meet its demands.
BHP, the world’s biggest mining company, offered Saskatchewan only a fraction of the C$3bn (£1.8bn) over 10 years that the province is seeking to make up for expected revenue losses, the province said in a statement.
Saskatchewan will now give the bid an unfavourable review later this week, a source close to the matter said, possibly leading to the Canadian government quashing the deal.
“BHP Billiton is confident it can address this concern and, in this regard, is prepared to make commitments which go beyond the requirements of prevailing Canadian legislation that should effectively address the tax loss concerns of the province,” the miner said.
City A.M. Reporter