CTV News reports Ottawa will approve the takeover of Potash Corp. of Saskatchewan by an Anglo-Australian company, but the federal government will attach conditions to make the deal more palatable.
The television network said it has been told the Conservative government is prepared to approve the $38.6-billion purchase of the world’s largest potash producer, but only if BHP Billiton agrees to “most of Saskatchewan’s demands.”
The company already has made numerous public commitments to the province, including that its global potash headquarters will be in Saskatchewan and that PotashCorp’s workforce in the province will be kept fully employed.
But BHP hasn’t committed to make up $3 billion in revenue over the next 10 years the Saskatchewan government claims it would lose if BHP takes over the independent, publicly-traded company.
Saskatchewan Premier Brad Wall said yesterday that $370-million, one-time payment by BHP into a proposed infrastructure fund wasn’t sufficient.
BHP Billiton, meanwhile, told shareholders earlier today at their annual meeting that it will not be caught up in a bidding war for PotashCorp and won’t overpay to acquire the Canadian company.
“The creation of shareholder value is clear and not negotiable,” chairman Jacques Nasser told the Anglo-Australian miner’s annual meeting in London.
BHP has bid $130 a share, or $38.6 billion (U.S.), for PotashCorp in what would be the biggest takeover in Canadian history.
However, the Saskatchewan potash producer has sought a white knight bidder—and stock markets have expected a rival and richer offer that BHP would have to match or top.
No rival bid has yet emerged but PotashCorp’s publicly-traded shares remain well above BHP’s offer price.
The Canadian company’s stock closed yesterday in Toronto at $145 (Cdn.)