Canadian provinces push Ottawa to block Potash bid

Fri Oct 29, 2010 9:05pm EDT
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By Pav Jordan and Louise Egan

TORONTO/OTTAWA (Reuters) - Potash Corp's home province is ratcheting up pressure on the Canadian government to block BHP Billiton's hostile approach, while the company still insists that rival bids could emerge.

Saskatchewan, where fertilizer producer Potash Corp is based, wants Ottawa to reject the Anglo-American mining giant's $39 billion offer, the largest takeover bid of 2010.

It says a deal would rob Canada of a key strategic resource, as well as cutting jobs, Saskatchewan's tax take and its royalty payments, and it says the provinces of Alberta, Manitoba, New Brunswick and Quebec also oppose the bid.

Alberta, Manitoba and Saskatchewan alone account for 48 of the 142 seats the ruling Conservatives hold in the House of Commons, and the minority government needs those seats to stay in power.

"How do you overcome the strategic concern? ... This is more important going forward for the country than maybe it ever has been because the world is prizing food security and energy security," Saskatchewan Premier Brad Wall said in Toronto.

"Isn't it time that we maybe got a little bit circumspect about deals that involve this size of a reserve and this size of a company? I guess that's our position."

Potash Corp is the world's biggest producer of its namesake crop nutrient, demand for which is soaring as food prices climb and demand for fertilizers rise. It has flatly rejected BHP's $130 a share offer as inadequate.

Potash Corp stock was up just over 2 percent at $145.75 on the New York Stock Exchange. The shares spiraled above BHP's the offer price in August, when BHP launched its bid, and have stayed above that level, signaling that investors expect a higher offer to emerge.   Continued...

<p>Rocanville Potash Corp underground production supervisor Dave Esslinger displays a sample of potash 1000 metres (3280 feet) below surface at the potash mine in Saskatchewan September 30, 2010. REUTERS/David Stobbe</p>