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BHP’s Kloppers Eyeing Acquisitions ‘Beyond’ Potash

BHP Billiton CEO Marius Kloppers
BHP Billiton Ltd. Chief Executive Officer Marius Kloppers. Photographer: Jason Alden/Bloomberg

Aug. 26 (Bloomberg) -- BHP Billiton Ltd. Chief Executive Officer Marius Kloppers, who has reduced debt by 41 percent to $3.3 billion, is looking to make acquisitions beyond his hostile $40 billion bid for Potash Corp. of Saskatchewan Inc.

“Beyond the acquisition of Potash, our aspirations to continue to grow the deployment of capital in the broader natural resources space would be undiminished,” Kloppers said on a full-year profit conference call. “We do feel that we’ve got flexibility in our balance sheet.”

Potash Corp. CEO Bill Doyle rejected last week’s $130-a-share bid from BHP, which could afford to pay as much as $180 a share for the Saskatoon, Saskatchewan-based company, according to Morgan Stanley. Kloppers, who said he’s keen to expand BHP’s petroleum unit, reported yesterday the company had $17.9 billion in full-year cash flow.

“BHP is still looking to grow in oil through M&A, but Potash is the focus at the moment,” Citigroup Inc. analysts led by Clarke Wilkins, said in a report yesterday. “We remain concerned that BHP ends up overpaying in getting the deal done, destroying value for its own shareholders.”

BHP shares were little changed at A$37.39, down 0.1 percent at the close of trading in Sydney on the Australian stock exchange. The share price has fallen 13 percent this year.

Oil companies operating in the Gulf of Mexico, Brazil and West Africa may be targets for BHP, Goldman Sachs & Partners Australia Pty said in May. BHP’s offer for Potash puts this year on course to be the busiest for natural resources deals.

“We’d like to, on the Potash transaction, clear the preconditions so that we’ve got a bid that is capable of being accepted,” Kloppers said on the call yesterday with analysts after the profit results. “That’s what you should look forward to as we proceed through the remainder of this calendar year.”

To contact the editor responsible for this story: Hwee Ann Tan at hatan@bloomberg.net

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