Sask. politicians vote to oppose PotashCorp bid
Saskatchewan provincial politicians agreed on the PotashCorp file Thursday — but not before a bit of scrapping.
In the legislature in Regina, the Saskatchewan Party government introduced an emergency motion that formally called on the federal government to reject the bid by Australian mining giant BHP Billiton to buy Saskatoon-based PotashCorp.
Premier Brad Wall had previously declared that the Billiton deal was a non-starter with him, saying it could cost the treasury billions of dollars in lost royalties and taxes over a decade.
Wall has said unanimous support for the motion should send a powerful message to Ottawa that there's a broad consensus of opposition to the takeover in the province, because it doesn't provide a net benefit to Saskatchewan.
"We need to say one message to Ottawa, and that is no to this deal," Wall said.
However, Opposition New Democratic leader Dwain Lingenfelter had questions for Wall about a newspaper report suggesting a group of Saskatchewan First Nations was also interested in leading a bid for PotashCorp.
Postmedia News said Thursday the First Nations are working with pension funds, Chinese investors and merchant banks to prepare a bid.
According to a spokesman for the Indigenous Potash Group, the parties have held a series of meetings in the past week with Saskatchewan officials, PotashCorp executives and potential investors.
Lingenfelter asked how Wall, after making a "Captain Canada" speech last week, could be holding negotiations about Asian investors.
The government says it's prepared to meet with First Nations groups at any time, but they're just meetings.
"There are no negotiations with anyone," Wall said.
The debate over the motion continued into the afternoon, but ended with MLAs giving unanimous approval.
Shares of Potash fell three per cent Thursday amid signs that the growing opposition to the BHP takeover is being heard in Ottawa. The Globe and Mail reported Thursday that Industry Minister Tony Clement is becoming more skeptical of the bid, citing unidentified sources.
On Wednesday, Alberta Premier Ed Stelmach said he supports Saskatchewan's opposition to the takeover.
The Harper government is expected to announce its decision next week on whether to allow the BHP bid.
PotashCorp earnings soar
As for PotashCorp itself, the fertilizer giant reported earnings Thursday that far exceeded analysts' expectations.
The company said third-quarter profits jumped to $402.7 million US, or $1.32 a share.
The general expectation had been that PotashCorp would earn 82 cents a share.
Revenues soared more than 40 per cent to $1.58 billion US.
The company said its strong earnings and solid outlook are clear evidence that BHP's $130 US a share bid is inadequate.
"We believe the fertilizer industry has passed an important inflection point and is returning to a period of powerful growth," said PotashCorp CEO Bill Doyle in a release that went out of its way to paint a rosy future for both the company and the industry.
"We see parallels to the demand-driven environment that led our company to five consecutive years of record performance prior to 2009."
So far, BHP's bid is the only one on the table, but investors clearly believe another higher bid will emerge, or that BHP will have to boost its offer.