BHP to take hostile bid to Potash shareholders

Australian mining giant BHP Billiton said Wednesday it will take its $38.6-billion US cash offer for Potash Corp. directly to the shareholders of the Saskatchewan company.

Australian mining giant BHP Billiton said Wednesday it will take its $38.6-billion US cash offer for Potash Corp. of Saskatchewan directly to the shareholders.

The move comes a day after the world's biggest fertilizer company rejected the BHP Billiton hostile offer as tantamount to "stealing."

In a statement on the BHP Billiton website Wednesday, chairman Jac Nasser said the company believes Potash Corp. shareholders will like the BHP offer.

"We firmly believe that Potash Corp. shareholders will find the certainty of a cash offer, at a premium of 32 per cent … very attractive."

The company also said it is committed to being a "strong corporate citizen in Saskatchewan, New Brunswick and Canada."

It said a submission to Investment Canada would include an intention to base the president and management of the Canadian potash operations in Saskatchewan.

The Saskatchewan government said Tuesday that any company that might be interested in taking over Potash Corp. will have to keep its home in the province. Provincial legislation dictates that Potash Corp. shall maintain its head office in Saskatchewan and Energy and Resources Minister Bill Boyd said there is no plan to repeal the law.

Canadian Industry Minister Tony Clement said Tuesday the government would review the bid closely, noting that acquisition of a controlling interest in a Canadian company with assets of $299 million or more by a foreign investor is always subject to scrutiny.

BHP Billiton also said Wednesday it would maintain current job levels at Potash Corp.'s Saskatchewan and New Brunswick operations "for the foreseeable future" and intends to propose a Canadian nominee to sit on the BHP Billiton Board.

Potash Corp. denounced the bid Tuesday as far too low to form the basis of serious negotiations but added it wouldn't shy away from a deal if the price is right.