Sinochem approaches Temasek on Potash bid

Tue Sep 7, 2010 3:05pm EDT
 

By Euan Rocha and Saeed Azhar

TORONTO/SINGAPORE (Reuters) - China's state-owned Sinochem Corp has invited Temasek, the Singapore sovereign wealth fund, to join a consortium that may bid for Canada's Potash Corp (POT.TO: Quote), the world's largest fertilizer supplier, sources with knowledge of the matter said on Tuesday.

The move follows an order by Chinese officials for state companies to meet investment bankers to explore ways to block BHP Billiton's (BHP.AX: Quote)(BLT.L: Quote) $39 billion hostile bid for Potash Corp.

Further raising pressure on BHP to sweeten its bid, Potash Corp said on Tuesday it had contacts with several other parties that had shown interest in possible transactions. It has called the Anglo-Australian miner's $130-a-share offer "grossly inadequate."

"A number of third parties have already expressed interest in alternative transactions, some whom we approached and others, who initiated contact on their own," Potash Corp Chief Executive Bill Doyle said in a video clip posted on the company's website. (www.potashcorp.com)

China, which typically buys about 7 percent of the output of Potash Corp, fears a BHP takeover might jeopardize supplies it will require to feed its huge population in coming years.

Potash Corp shares on Tuesday rose $1.11 to $149.61 on the New York Stock Exchange, or 15 percent more than the BHP offer price, reflecting anticipation of a higher bid eventually.

Shares of BHP closed down 1.4 percent in London, partly on concerns that Australia's new Labor government might impose a new resource tax on iron ore and coal miners.

TEMASEK APPROACHED   Continued...

 
<p>A train car waits in line at the Potash Corp's Cory mine site near Saskatoon in this August 19, 2010 file photo. REUTERS/David Stobbe</p>