BHP Hires Canada Prime Minister Advisers for Potash

Stephen Harper, Canada's prime minister
Stephen Harper, Canada's prime minister. Photographer: Norm Betts/Bloomberg

BHP Billiton Ltd. hired advisers to three Canadian prime ministers to lobby for its $40 billion hostile bid for Potash Corp. of Saskatchewan Inc.

Michael Coates, an adviser to Prime Minister Stephen Harper in the last three election campaigns, registered for BHP, according to the website of the country’s lobbyist registry. William Pristanski, an aide in the 1980s to former Conservative leader Brian Mulroney, and Bruce Hartley, former assistant to the Liberals’ Jean Chretien, also registered on behalf of BHP.

BHP may face competition for the world’s largest fertilizer maker from China, with Sinochem Group hiring Deutsche Bank AG and Citigroup Inc. to assess ways to disrupt the bid, the Financial Times said today. Canadian opposition lawmakers have called on the government to set conditions on any foreign acquisition of the Saskatoon, Saskatchewan-based company.

“I’m obviously anxious to understand completely and fully the type of proposal they are making,” Ralph Goodale, deputy leader of the main opposition Liberal Party and his party’s only legislator from Saskatchewan, said in a telephone interview. “They have an extensive public outreach and communications campaign under way in Saskatchewan.”

BHP, based in Melbourne, had no active lobbyists registered on its behalf until last month. Chief Executive Officer Marius Kloppers is scheduled to be in Ottawa for meetings with lawmakers today.

China has also indicated its approval for Sinochem to assess ways to disrupt BHP’s offer, the Financial Times cited one unidentified person as saying. Industrial & Commercial Bank of China Ltd. may also be part of the group, the report said.

‘Watching’ Bid

Sinochem, China’s largest fertilizer trader, said in August it’s “closely watching” the bid. Joining the contest may indicate China’s desire to stop BHP from controlling more supplies to the world’s biggest consumer of commodities after years of price tensions over iron ore.

Executives at Sinochem couldn’t be reached for comment today as China is closed for a national holiday.

Goodale, one of the Liberal lawmakers meeting Kloppers, said his main concern is about the need to maintain the province’s marketing strategy for potash.

Government officials in Saskatchewan, including Energy and Resources Minister Bill Boyd, have said they are concerned that an acquirer may break up the fertilizer marketing company Canpotex, which may lead to lower prices for potash exports. Canpotex is jointly owned by Potash Corp., the largest producer of its namesake fertilizer, Mosaic Co. and Agrium Inc.

Potash Corp. dropped 1.3 percent to C$150.55 in trading yesterday. It’s trading 16 percent above BHP’s offer of $130 a share. BHP fell 3 cents to A$38.69 at 10:56 a.m. in Sydney.

Kloppers Meetings

Kloppers is scheduled to meet New Democratic Party Deputy Leader Thomas Mulcair today, according to Marc-Andre Viau, a party spokesman. The Liberal lawmakers will meet the CEO later in the day, Goodale said.

Industry Minister Tony Clement told reporters he has no plans to meet Kloppers this week. Andrew MacDougall, a spokesman for the prime minister, said the leader’s office doesn’t comment on Harper’s meetings with people who are not politicians.

Asked by Layton in Parliament yesterday about the proposed purchase, Harper said there are laws in place to review foreign acquisitions.

“This government’s position has not been to give a blank check to foreign takeovers,” Harper told lawmakers. “There is a law in place.”

BHP has said that should it acquire Potash Corp. it would make Saskatchewan home to its head office for potash operations, continue developing its Jansen potash project in the province, maintain current employment levels and propose a Canadian nominee for election to its board.

Deadline Extended

BHP extended the deadline for acceptance of its bid to 11:59 p.m. Eastern Time on Nov. 18 to allow time for the completion of the regulatory review. Amanda Buckley, a BHP spokeswoman, declined to comment on any meetings Kloppers may have with lawmakers.

Harper said yesterday that he’s spoken to Saskatchewan Premier Brad Wall and will “examine” the provincial leader’s concern as the federal government does its review. Wall told reporters yesterday he isn’t convinced a takeover of Potash Corp. is good for the province.

The Lobbyists

Coates, CEO of consulting firm Hill & Knowlton Canada, was leader of Harper’s debate preparation team in the last three elections, according to his biography on the firm’s website. Pristanski is a principal at Ottawa-based consulting firm Prospectus Associates, while Hartley is a partner there.

Potash Corp. has hired Brian Klunder and John Capobianco of consulting firm Fleishman-Hillard, and Lawson Hunter of law firm Stikeman Elliott LLP as lobbyists.

Foreign takeovers of major Canadian companies are automatically reviewed in Canada under the Investment Canada Act. Under the act, the government can block any transaction if it finds insufficient “net benefits” to the country, based on such factors as employment and productivity.

In the past 25 years, Canada has only formally rejected one takeover offer, Alliant Techsystems Inc.’s bid for MacDonald Dettwiler & Associates Ltd.’s space business in 2008.

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