Canada says no to BHP's $40-bn hostile bid for Potash Corp
04 November 2010
Following Canada blocking BHP Billiton Ltd's $40 billion hostile takeover bid for Potash Corp of Saskatchewan Inc, the company stock rose to the highest in almost six months in Sydney trading yesterday.
BHP said it was disappointed and would weigh its options; the company has 30 days to lodge an appeal.
Canadian prime minister Stephen Harper's government said yesterday a sale of the world's largest fertiliser company would not provide a ''net benefit'' to the nation.
BHP chief executive officer Marius Kloppers has tied up $45 billion of loans in September to fund the proposed $130 a share acquisition, which has drawn strong opposition from politicians and investors.(See: BHP's Potash Corp takeover bid finds favour with Investment Canada)
Analysts said a sentiment in the market favoured BHP to sticking to its core commodities and does not want it to get intoi the unrelated acquisition Potash Corp.
The Potash Corp acquisition would see BHP enter the fertiliser business allowing it to leverage the projected increase in demand as the expanding world population consumes more food. It would also be Kloppers biggest acquisition after he became BHP's chief executive officer in 2007.