Potash Corp seeks permission to raise ICL stake

Mon Dec 19, 2011 11:11am EST
 
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By Tova Cohen and Euan Rocha

TEL AVIV/TORONTO (Reuters) - Canadian fertilizer maker Potash Corp (POT.TO: Quote) is seeking permission from Israeli authorities to raise its stake in rival Israel Chemicals (ICL.TA: Quote) to 25 percent, a government source said.

"Potash Corp has requested approval from the government to raise its stake to 25 percent," the source, who asked not to be identified, told Reuters on Monday, confirming a report in the Calcalist financial daily.

Potash POT.N, the world's largest fertilizer manufacturer, holds 13.9 percent of ICL's shares valued on the market at 6.5 billion shekels ($1.7 billion). An 11.1 percent stake has a market value of about 5.23 billion shekels.

Shares in ICL, one of the world's largest potash producers and the second-largest company on the Tel Aviv Stock Exchange, were up 5 percent at 37.65 shekels in afternoon trade.

A spokeswoman for ICL said the company does not comment on matters relating to its shareholders. Potash last acquired ICL stock in 2010 when it bought about 2.5 percent.

A spokesman for Potash Corp confirmed that the company has asked for permission to raise its stake, but stressed that it is not a foregone conclusion that it will do so.

Potash Corp said that due to threshold restrictions it needs approval from the Israeli government to allow it to increase its stake to between 14 percent and 25 percent.

"If the application is granted, it will give us one more option in our use of free cash flow when we are making investment decisions," said Potash Corp's head of public affairs, Bill Johnson.   Continued...