UPDATE:BHP Focused On Getting Canada Regulatory OKs For Potash
October 21 2010 - 2:24PM
Dow Jones News
Mining titan BHP Billiton Ltd. (BHP) said Thursday it believes
its takeover of Potash Corp. of Saskatchewan Inc (POT) would
provide net benefits for Saskatchewan and said it remains focused
on getting Canadian regulatory approvals.
BHP's unsolicited $39 billion bid to buy Potash Corp.,
Saskatchewan's largest company, has come under fire from
Saskatchewan officials who are expected to tell the Canadian
government--as early as this week--that BHP's proposed deal doesn't
benefit the province.
Talks between BHP and the provincial government broke down after
BHP failed to offer what the province considered adequate
compensation for futures losses in tax revenue. Saskatchewan
expects to lose three billion Canadian dollars ($2.9 billion) in
tax revenue because BHP is entitled to a tax deferral under
Canadian law due to the closure of the deal.
BHP said in a statement Wednesday that it will continue to work
with Canada's Investment Review Division to secure federal approval
for the deal.
The deal is expected to result in "net benefits" for
Saskatchewan and "in this regard, we continue to focus on gaining
Canadian regulatory approvals," Marius Kloppers, chief executive of
BHP, said at the company's annual general meeting.
BHP has offered to transfer Potash's head office to
Saskatchewan, anchor BHP's global potash headquarters in the
province, and retain Potash Corp.'s existing workforce in
Canada.
A Saskatchewan rejection wouldn't kill the BHP bid for Potash,
the world's largest supplier of potash, an important fertilizer
ingredient. The province provides a recommendation to federal
Canadian investment regulators, who have final say over a
transaction. The deadline for that decision is Nov. 3.
BHP already extended its $130-a-share tender offer to Potash
Corp.'s shareholders until Nov. 18, due to delays in securing
regulatory approvals. The company said it would only go ahead with
the deal if it is able to purchase more than half of Potash Corp.'s
shares.
Market observers say BHP will likely have to raise its bid to
secure enough shares but Jac Nasser, BHP's chairman said at the
company's annual general meeting that BHP would only close on a
deal that creates value for shareholders.
"There's no ego here. There is no: 'Absolutely, we have to do
the deal,'" he said. "You can rest assured that if it doesn't
represent shareholder value, we will walk away."
-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328;
alex.macdonald@dowjones.com
(Phred Dvorak, Alison Tudor, Dennis K. Berman and Edward Welsch
contributed to this article.)