Instant view: Canada blocks BHP's bid for Potash Corp

Wed Nov 3, 2010 6:36pm EDT
 
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OTTAWA (Reuters) - Following are reactions to Canada's decision to block BHP Billiton's $39 billion bid to take over Potash Corp, the world's largest fertilizer supplier.

JOHN STEPHENSON, SENIOR VICE PRESIDENT AT FIRST ASSET

INVESTMENT MANAGEMENT INC:

"I'm surprised. I think it comes as a shock to the market. I think most people watching this would've thought it would've gone the other way. I think it goes in the face ... of the direction of the government of Canada for the last number of years, which is we're open for business. Clearly, we're sending a signal that no, we're not."

BOB GORMAN, CHIEF PORTFOLIO STRATEGIST AT TD WATERHOUSE:

"Essentially he (Clement) has given BHP 30 days to sweeten the bid ... Saskatchewan has concerns that they are going to see their provincial finances very adversely affected by the BHP deal. There are other issues as well. But it seems to me that's front and center. In the next few weeks, BHP is going to put, in front of all concern, some sort of proposal that will alleviate those concerns."

"This does not mean this deal is dead. It means as originally proposed it is dead. Now, can BHP sweeten the pot sufficiently to address the concerns that are on the table?"

"They've (BHP) given this quite of bit of thought, it seems to me. By all accounts, they have been weighing some sort of bid for some time. I doubt they would be dissuaded at this stage. Whether or not they can put forward a deal that will both satisfy the needs of Saskatchewan and the federal government, while still being good for BHP shareholder, is open to question. But I would fully anticipate that they would come back with another offer."

"I'm not sure it will have much of a short term impact on the (Potash share) price because I think if you had the deal scuttled once and for all you could expect some downward movement in the stock ... Maybe you see some reaction. I don't think it will be dramatic because I think the market will anticipate BHP coming back with a deal."   Continued...