BHP denies any plans to divest Potash Corp assets

Mon Aug 30, 2010 6:12pm EDT
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By Euan Rocha and Michael Erman

TORONTO/NEW YORK (Reuters) - BHP Billiton denied speculation on Monday that it planned to sell any of Potash Corp's assets if it succeeds with its $38.6 billion hostile bid for the world's largest fertilizer producer.

Even so, analysts believe that BHP, the world's largest miner, would offload assets that are not part of its core strategy of dominating the global potash industry.

If it decided to do so, BHP may find a ready buyer in Agrium Inc, the Canadian fertilizer maker and farm products retailer. Agrium indicated it would consider buying Potash Corp's nitrogen and phosphate assets, which are worth an estimated $12 billion.

BHP's denial came in response to a note from Mark Gulley, a Soleil Securities analyst who listened in on a BHP briefing in Toronto last week. He wrote that the Anglo-Australian miner was considering a sale of Potash Corp's nitrogen and phosphate assets in the event of a deal.

Potash -- the common name for various compounds containing potassium -- accounts for the majority of the Saskatoon, Saskatchewan-based company's fertilizer assets, with the rest made up of the other two fertilizer groups.

"At this stage BHP Billiton has no plans to sell any Potash Corp assets. Our offer is for the whole company, including the phosphate and nitrogen businesses," a BHP spokesman said, referring to Potash Corp.

National Bank of Canada analyst Hari Sambasivam said the company told those at a Toronto briefing on August 26 that it had no plans to divest assets. Still, he also seemed unconvinced that BHP would necessarily keep all the assets over the long term.

"We came away with the view that BHP will not move abruptly to monetize the non-potash assets, although such a move may be contemplated over the long term," Sambasivam wrote in a note.   Continued...