Saskatchewan Premier Brad Wall said his province’s opposition to BHP Billiton Ltd.’s $40 billion hostile takeover offer for Potash Corp. of Saskatchewan Inc. is not a bargaining stance.
“It’s our position and we will continue to make that case in the days ahead,” Wall said today in a telephone interview. “It’s not a bargaining position.”
Wall said last week he is recommending the country’s federal government reject BHP’s hostile bid because it wouldn’t provide a net benefit for Canada or his province. Under the Investment Canada Act, the federal government can block any transaction valued at C$299 million ($294 million) or more if it finds it doesn’t provide a “net benefit” to the country.
Canada has until Nov. 3 to complete a review of the bid, unless Melbourne-based BHP, the world’s largest mining company, agrees to an extension.
Wall said today he favors an extension of Investment Canada’s review of the proposed transaction for Saskatoon, Saskatchewan-based Potash Corp., the world’s largest producer of its namesake crop nutrient.
“More time the better, frankly, for this to be talked about across our country,” Wall said in the interview. “This is like no other deal that has been the subject of a review by Investment Canada because of its size in terms of dollars, but also because of the amount of the resource that’s being transferred to a company that’s based in Melbourne versus Saskatoon.”
Saskatchewan rejected an offer of C$370 million of infrastructure investment from BHP, according to an Oct. 19 e-mail from an official of the Canadian province.
The investment doesn’t come close to offsetting the C$3 billion in revenue Saskatchewan will lose over 10 years should BHP acquire Potash Corp., said the official, who declined to be identified because the talks between BHP and the province were private.
The BHP executive who heads BHP’s non-ferrous businesses, which includes fertilizers, said on Oct. 22 his company may not seek an extension of the review.
“I’m not that interested, I want the whole thing done by Nov. 3,” Andrew Mackenzie said Oct. 22 in a telephone interview from Ottawa. “All the facts are on the table and it would benefit from an early resolution.”
Wall said he expects to meet with federal Industry Minister Tony Clement this week to discuss the issue, without providing an exact time or location.
Wall plans to speak publicly about his opposition to the takeover at the Economic Club of Canada in Toronto on Oct. 29, Kathy Young, a spokeswoman for the premier, said today in an e-mail. Wall scrapped plans to speak tomorrow in Calgary because of scheduling issues, Young said.
“We’re going to make this case right up until the federal government makes its decision,” said Wall, who highlighted the “strategic” importance of Saskatchewan’s reserves of potash in an Oct. 21 speech to business leaders in Regina, the provincial capital.
Wall today in a statement urged Canada’s federal government to take note of comments attributed to former BHP Chairman Don Argus in a 2008 article. Argus, quoted in Hellenic Shipping News, warned that too much foreign control of natural-resources companies in Australia risked turning that country into a “branch office -- just like Canada.”
BHP spokeswoman Bronwyn Wilkinson said Potash Corp. had “drifted from its Canadian roots” under the company’s existing management. “BHP Billiton will return control of the business to Saskatchewan from Chicago,” she said today in a telephone interview from Vancouver.
Potash Corp. rose $1.91, or 1.3 percent, to $143.70 at 4:15 p.m. in New York Stock Exchange composite trading. BHP gained 53.5 pence, or 2.4 percent, to 2,252.5 in London.
Potash Corp. rejected BHP’s offer in August as too low and said it was seeking alternative offers amid rising prices for agricultural commodities.