BHP says it won't buy Potash "at any cost"

Wed Aug 25, 2010 4:51pm EDT
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By Sonali Paul and Eric Onstad

MELBOURNE/LONDON (Reuters) - BHP Billiton, tried to damp expectations it would sweeten its hostile $39 billion offer for Potash Corp even as the world's biggest miner showed it had the wherewithal to up the ante.

Reporting its richest half-year profit in two years on Wednesday, the Anglo-Australian miner also revealed a hefty balance sheet and annual cash flow of $17.9 billion.

Combined with $45 billion in loans BHP has arranged, the results sent a strong signal that BHP has the financial muscle to raise its $130-a-share offer for Potash Corp, the global fertilizer leader.

But BHP Chief Executive Marius Kloppers sought to discourage the notion that he might enhance a takeover offer that already ranks as the highest of the year.

"I will be as disciplined on this bid as I've been on every other endeavor," the 47-year-old South African said on a conference call with reporters. "The shareholders own the company (BHP), and it's my job to create more value for them, not to do any one thing at any cost."

Kloppers, who is trying to clinch his first major deal after three years on the job, would have ask shareholders to approve an offer above $158.50 a share, or $47 billion, because it would exceed 25 percent of BHP's market capitalization.


Investors have pushed Potash shares 13 percent above the $130-a-share bid, betting that BHP will boost its offer, or a rival bidder will emerge. A Reuters survey indicated Potash shareholders would accept $162 a share.   Continued...

<p>Pedestrians walk past the head office of BHP Billiton in central Melbourne August 18, 2010. REUTERS/Mick Tsikas</p>