Canada lets slip one reason for blocking BHP bid
By David Ljunggren and Euan Rocha
OTTAWA/TORONTO (Reuters) - Canada's farm minister offered one reason that Canada blocked the proposed takeover of Potash Corp on Thursday, but markets will have to wait a month for all the details to emerge.
Farm Minister Gerry Ritz, in comments his office later said were just speculation, argued that letting BHP Billiton buy the fertilizer giant would have offered Australia's farm sector too much of an advantage.
"Having someone different mine (potash) certainly does make a difference in that Australia is a major marketer of a lot of the same foodstuffs that Canada is. We're a volume producer -- so are they," Ritz told Parliament.
"And for them to be able to go to the Indias and Chinas of the world and say 'We now control your fertilizer too' I think would have had a very detrimental effect. And I know the ministry of industry took all of that under advisement and it helped ... formulate the decision."
Potash Corp is the world's biggest producer of its namesake chemical, an essential crop nutrient. Analysts said the company was now set to go it alone as a stand-alone company, just as it was before BHP launched its hostile bid in August.
"I'm happy it's a stand-alone company. That's what I want," said Barry Schwartz of Baskin Financial, which owns about 35,000 Potash Corp shares. "At the end of the day, we will be able to control the price of potash and supply to China. Shareholders will be the real winners here.
Potash Corp stock fell just 2.4 percent on Thursday, the first trading day after the Canadian announcement. It closed at $141.97 a share, still above BHP's offer price of $130-a-share, and analysts say fundamentals for the company are strong.
Desjardins Securities raised its Potash Corp to buy from hold, and set a price target of C$175. Continued...