BHP says timed Potash bid as rivals were weakened

Sun Aug 29, 2010 3:38am EDT
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By Sonali Paul

MELBOURNE (Reuters) - Global miner BHP Billiton on Sunday played down any chance of raising its $39 billion bid for fertilizer maker Potash Corp, saying it had timed its move to catch out weakened rival bidders.

Chief Financial Officer Alex Vanselow, speaking in an Australian television interview, also said the hostile bid had been timed to ensure more ready access to credit markets.

"The opportunity in Potash is that we are now in a situation that our balance sheet allows us to raise the credit necessary to buy, the valuations match, and basically if you look at the landscape of competitors, they're not in the same position as we are," Vanselow told ABC's Inside Business show.

"So you've taken all this into consideration -- you can see this is an opportune time to make a bid."

BHP, the world's biggest miner, unveiled its biggest half-year profit in two years on Wednesday, with just $3.3 billion in net debt and gearing at a low 6 percent, putting it in a strong position to raise its offer if necessary.

Potash Corp's shares last traded 14 percent above BHP's offer price, as investors bet that BHP will have to pay more or another bidder will emerge, but Vanselow said there was no need for BHP to raise its offer of $130 a share.

"There is only one offer on the table, so why would we compete against ourselves?"

Rival miner Rio Tinto is considered unlikely to make a counterbid as it has only just recovered from a mountain of debt it took on for its $38 billion takeover of Alcan three years ago. Rio Tinto has since said that it would only consider smaller acquisitions.   Continued...

<p>Alex Vanselow, chief financial officer of BHP Billiton, speaks during a media briefing in Sydney August 25, 2010. REUTERS/Daniel Munoz</p>