Liberals' Goodale Leaning Toward Opposing BHP's Hostile Potash Corp. Offer
Ralph Goodale, deputy leader of Canada’s main opposition Liberals, said he may call on the government to oppose BHP Billiton Ltd.’s $40 billion hostile bid for Potash Corp. of Saskatchewan Inc., citing concern that the offer price is too low and BHP may dominate the industry.
“Based on what I’ve seen, the arguments I’ve heard, I think this answer should be no,” Goodale, the Liberal Party’s sole lawmaker in Saskatchewan, said today in a telephone interview. “It looks like the value is too low and it looks like the benefits are more negative than positive.”
Liberal opposition may turn the proposed transaction into an election issue, raising the stakes for Prime Minister Stephen Harper’s government as it reviews whether to accept the deal. The federal government has until Nov. 3 to block the bid if it finds it doesn’t provide a “net benefit” to the country, unless BHP agrees to an extension.
Potash Corp., the world’s largest producer of its namesake crop nutrient, in August rejected Melbourne-based BHP’s offer as too low and said it was seeking other offers.
Goodale said the sale of Potash would effectively give BHP control of the “entire” industry.
“Taking a longer-term perspective, I’m just very uneasy about this,” Goodale said.
Saskatchewan has said it will advise the federal government of its views on BHP’s $130-a-share bid. Energy and Resources Minister Bill Boyd said in an Oct. 6 interview with Bloomberg Television the offer doesn’t appear to be beneficial to his province.
A report by the Conference Board of Canada, commissioned by the province, said Saskatchewan would lose C$2 billion ($1.94 billion) in tax revenue over 10 years should BHP’s bid succeed.
Canadian Industry Minister Tony Clement said last week the federal government is considering all points of view, including that of the Saskatchewan government, on the benefit of the BHP bid to Canada.
Clement also said that while he has heard “rumors” of other companies seeking to acquire Potash Corp. besides BHP, he hasn’t spoken to any other potential bidders.
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