Canadian Industry Minister Tony Clement said today he hasn’t heard from BHP Billiton Ltd. and anticipates the company will want to meet his officials to learn why its $40 billion bid for Potash Corp. of Saskatchewan Inc. was rejected.
“Should BHP wish this to happen, we would schedule a meeting between them and my officials to actually discuss what particular aspects of the net benefit to Canada test were not successful,” Clement said today in a Bloomberg interview in Ottawa. He added BHP wouldn’t know from the notice he sent the company why the bid was blocked.
Clement yesterday rejected the bid by Melbourne-based BHP, the world’s largest mining company, saying the proposed takeover doesn’t provide a “net benefit” to Canada. BHP has 30 days to convince Clement to change his position. Clement, 49, said he is legally constrained from explaining the rejection publicly, adding he is “anxious” to provide his reasons once the appeal period is over.
“We anticipate that they will want to sit down with the officials,” Clement said of BHP, so the company can “understand the basis for the decision, which is, I can assure you, a very detailed examination of their bid and how it fits into our legislation.”
Clement also said he made a “principled” ruling based on the law, rather than a “political” one.
“As we said yesterday, BHP will continue to engage with the minister and the investment review division of Investment Canada and will review its options,” Ruban Yogarajah, a London- based spokesman for BHP, said today in a telephone interview.
Under the Investment Canada Act, the government can block any transaction valued at C$299 million ($298 million) or more if it finds it doesn’t provide a “net benefit” to the country, based on factors such as output and jobs.
Saskatchewan is home to the world’s largest reserves of potash, a form of potassium farmers use to boost crop yields. Saskatoon-based Potash Corp. is the world’s largest maker of potash by capacity and produces nitrogen- and phosphate-based crop nutrients.
Potash Corp. slid 2.4 percent today to $141.97 at 4:15 p.m. in New York Stock Exchange composite trading. Clement issued his decision after markets closed yesterday.
“I would say to any investor, you make an investment and you make certain calculations,” Clement said. “Sometimes those calculations come true; sometimes they don’t come true. The government of Canada doesn’t owe them anything.”