BHP will stick to $39bn bid for Potash

 
City A.M. Reporter
BHP Billiton chief executive Marius Kloppers said yesterday the company has no intention of changing its $39bn (£25bn) takeover offer for Potash, the world’s biggest fertiliser producer.

During a visit to the home base of its takeover target intended to build political support in Canada, Kloppers brushed aside rumours that China, through its state-owned companies, might be assembling a rival bid.

“We have no plans to change what is currently the only offer on the table,” he said. “I’ve seen a lot of speculation and rumours [about a China-backed offer] but the reality is there is only one cash bid on the table and that’s ours at the moment.”

The 19 October deadline for Potash shareholders to sell their shares to BHP could be pushed back, depending on whether competition regulators in Canada and the United States ask for more time to review BHP’s proposal, he said.

BHP expects to hear today whether the Canadian Competition Bureau will allow its $130 per share bid for Potash to proceed. Potash has rejected the offer as inadequate.

Saskatchewan, the Canadian province that is home to Potash, has said it is concerned about the possibility that BHP will remove Potash’s mines from Canpotex, the offshore marketing arm of Saskatchewan potash producers.

Saskatchewan, which will advise the Canadian government on whether to approve the takeover bid, depends heavily on potash royalties, which are determined largely by the fertiliser nutrient’s price.

Asked about BHP’s potential participation in Canpotex, Kloppers said the company prefers to do its own marketing, but that “nothing is static forever”. Kloppers also said Canpotex’s marketing infrastructure is unrivalled. “We would have no intention of duplicating that.”

Kloppers spoke to reporters at the opening of BHP’s office in Saskatoon, where Potash is based. At least one Saskatchewan cabinet minister was in attendance.