Feb. 28 (Bloomberg) -- Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, said a proposed bid for Israel Chemicals Ltd. isn’t suspended and it’s still trying to make the deal work.
“The process there is not on hold, it’s not frozen, it’s not suspended,” Potash Corp. Chief Financial Officer Wayne Brownlee said yesterday at an investor conference organized by Bank of America Merrill Lynch.
Brownlee said he wanted to clarify some “loose words” in a presentation he made the day before when he said “political events” had put the deal “on hold.” He said Feb. 26 that Saskatoon, Saskatchewan-based Potash Corp. was waiting for the outcome of Israeli talks to form a coalition government after elections last month. The state holds a so-called golden share in Israel Chemicals, allowing it to block a takeover.
Israel Chemicals is the second-largest company by market value on the Tel Aviv Stock Exchange’s benchmark TA-25 Index. It had a market capitalization of 61.1 billion shekels ($16.4 billion) at today’s close.
The chairman of the company’s workers committee said Feb. 21 that employees would shut down all plans if the deal goes ahead. The workers are concerned that a transaction would lead to jobs being transferred to neighboring Jordan. The deal was also opposed by a group of lawmakers at a Feb. 27 meeting.
Brownlee said yesterday he expects the government will have concerns about issues such as jobs and production levels.
“We need to make sure that we have a good package that addresses that on a sustained basis, without hurting our shareholder return,” he said.
Israel Chemicals, based in Tel Aviv, extracts potash from the Dead Sea and is controlled by the Ofer family’s Israel Corp., which owns 52 percent. A takeover would lift Potash Corp.’s share of forecast global potash production capacity in 2013 to 27 percent, according to data compiled by Green Markets, a fertilizer-industry information service.
Potash is a form of potassium that helps crops withstand drought and strengthens plant root systems. Potash Corp.’s largest potash mines are in Saskatchewan.
Brownlee said Feb. 26 that his company is seeking 51 percent to 100 percent of Israel Chemicals and won’t go hostile. Potash Corp. currently has a 14 percent stake, according to data compiled by Bloomberg.
“We are continuing to try to move down this path in a way that we think we’ll generate the best possible outcome and in a way that will allow us to anticipate the requirements of the government of Israel, the employees, the communities that would be affected in a way that would generate a win-win situation for everybody,” he said yesterday.
“There will be greater clarity in the weeks and months to come.”
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