Canada fund approached by China investors on Potash

Thu Sep 2, 2010 6:49pm EDT
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By Rod Nickel and Joseph Chaney

TORONTO/HONG KONG (Reuters) - Chinese and other investors have approached at least one big Canadian pension manager about a bid for Canada's Potash Corp to rival BHP Billiton's $39 billion hostile offer.

Thursday's disclosure by Alberta Investment Management Corp, which manages some C$70 billion ($67 billion) in public sector pension funds, is one of the first pieces of hard evidence to back suspicions that China is looking for a way to derail a takeover of Potash Corp by the powerful Anglo-Australian miner.

In another sign of Chinese interest in countering BHP's $130-a-share offer, China's state-run chemical group Sinochem has hired HSBC to advise on its options, the Wall Street Journal said, while Saskatchewan, where Potash Corp is based, is seeking its own independent probe of the takeover.

China, which 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.

Leo de Bever, chief executive of the Alberta public-sector pension manager, said he had fielded inquiries from a number of parties, including sovereign wealth funds.

He said Chinese investors were among those asking him to consider participating in a bid for Potash Corp, the No. 1 fertilizer supplier.

"We don't have any feeling of nationality of counter-parties. We work with people in other countries all the same, and we would be pleased to work with the Chinese entity if that made sense," said de Bever. But he also said AIMCo was not interested in a Potash deal at this point.

"We can't right now make the economics work," he told journalists in Calgary.   Continued...

<p>PotashCorp mill general superintendent Trevor Berg holds a handful of chicklet potash at a potash holding centre at the Cory mine facilities near Saskatoon, August 19, 2010. REUTERS/David Stobbe</p>