BHP fights for a Potash deal

 
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BHP BILLITON faces a crucial week in its fight to buy Potash Corp, with the Canadian government and US courts deciding whether to allow its $39bn (£24.7bn) hostile offer to proceed.

Potash attempted to goad BHP into raising its $130 a share bid at the weekend in a Canadian court filing, claiming it was “very likely” that the FTSE 100-listed firm would increase its offer given that Potash shares were trading at $147.32 on Friday.

Potash also claimed that it “has engaged in discussions with 15 strategic, financial and state-sponsored potential bidders or investors.” A Potash spokesperson declined to comment further yesterday, though more details could emerge when the firm appears in an Illinois court as part of its lawsuit against BHP on Thursday.

A Sunday newspaper also reported yesterday that BHP would sweeten its deal by around 10 per cent once it has cleared the looming regulatory hurdles. BHP declined to comment on whether or when it would raise its bid.

Canadian authorities have until Wednesday to either block or allow BHP’s takeover offer, depending on whether it sees an economic benefit for the country.

The government in Saskatchewan, where Potash is based, has opposed the deal, but several sources have claimed the federal government will give the green light.

BHP continues to seek a cease trading order on Potash’s new shares, which it issued in September as part of a “poison pill” defence. Potash said it diluted BHP’s share holding to give it time to find alternative bids, and continues to fight the case with the Saskatchewan Financial Services Commission.