Sask. premier says 'no' to PotashCorp bid
The Saskatchewan government has decided it cannot support BHP Billiton's proposed takeover of Potash Corporation, Premier Brad Wall says.
"We must say no to this hostile takeover," Wall told a business audience in Regina on Thursday.
Anglo-Australian mining giant BHP Billiton has offered $38.6 billion US for PotashCorp, which has corporate offices in Saskatoon and Chicago and employs 1,600 workers at five mines around the province.
Wall said that after thoroughly studying the bid, the provincial government is opposed. The Billiton proposal could be a "net loss" for Saskatchewan and would not be in the country's strategic interests, Wall said.
Investment Canada will decide next month whether the takeover can proceed. The deal does not need Saskatchewan's support, although observers say the province carries some weight in the discussion.
Wall argued the deal would give a foreign-controlled company access to a large percentage of the country's potash supplies.
"This takeover involves 25 to 30 per cent of the known reserves in the world of potash," Wall said. "This is different. This is not like any other takeover that we have contemplated in the country."
Wall also referred to a recent report from the Conference Board of Canada that said the deal could result in losses to the Saskatchewan treasury of $2 billion to $6 billion over the next decade.
BHP Billiton has promised to compensate Saskatchewan for those losses, but the premier was skeptical, saying promises can't be used to build schools.
For many years, royalties and taxes from potash revenues have been an important source of income for the Saskatchewan government.
Wall also used the speech to respond to a statement by Prime Minister Stephen Harper Wednesday.
Asked about the bid in question period, Harper said, "This is the proposal for an American-controlled company to be taken over by an Australian-controlled company."
Wall, who didn't mention Harper by name, insisted that PotashCorp is not a foreign-controlled company, adding that Canadians own the largest percentage of shares.