Agriculture

BHP Billiton Might Be Trying To Takeover Potash Corp Again.

So this news item seemingly fell through the cracks over the Canada Day long weekend. In Saskatchewan, anyway.

From the Australian Financial Review, June 30 2016:

“Potash Corp, the world’s second-largest producer of its namesake fertiliser, (stock) is rallying amid rumors of a possible takeover of the Saskatchewan-based company…

A bid may come from any of the company’s competitors, including CF Industries Holdings or Agrium, and if BHP Billiton wants to make a second attempt to acquire Potash Corp “I don’t think there would be a better time than this,” (Jonas Oxgaard, an analyst with Sanford C. Bernstein & Co.) said.

…The company doesn’t respond to market rumors, Potash Corp spokesman Randy Burton said in email.”

Huh.

The rumor appears to have been started on stock market-news website TheFly.com:

“The move higher in shares of Potash Corporation of Saskatchewan coincided with traders circulating chatter of a potential takeover. The chatter has Potash hiring an investment bank after possibly receiving an unsolicited takeover proposal.”

So what I’m taking away from this is Potash Corp may be analyzing an unsolicited takeover bid, but nobody knows from who. Lazy speculation is that it’s from BHP Billiton, but as the Canadian Mining Journal rightly points out, BHP is in the middle of getting its own multi-billion dollar Jansen mine off the ground, so why would they want to spend more on PCS?

Yes, BHP Billiton’s Jansen is still moving forward, despite Sask Party MLA Glen Hart’s valiant attempt to convince us otherwise.

(For the record, it was my clients (I contract media relations services) who were told, by Hart, that BHP is about to “walk away” from their Jansen project.

Hart knew damn well he was being recorded. This is made clear within the first minute of the hundred-minute recording, of which I have a copy, my clients have a copy, Hart has a copy, and the government has a copy.

As for Hart’s excuse that he was taken out of context, repeated by Premier Wall in the House – that’s adorable and also bullshit.

“I guess their (BHP) people in Saskatoon phoned some of our people, I guess, and said that they’re at a stage now where if the board of directors doesn’t authorize any more expenditure on this project, they’re going to walk way. They will have to do remediation and so on…and that’s.. that’s my understanding.” – Sask Party MLA Glen Hart, June 14, 2016

This as part of a response on tiered-project financing.

If this ever comes up again, I had better not hear that excuse, because it would be a lie. K?)

Anyway, back to the subject at hand – BHP is the lazy theory as the possible bidder for PCS, but as trading site Motley Fool explains, a more reasonable theory is a home-grown merger with a company like Agrium, who like PCS, use Canpotex to market their goods. PCS + Agrium = Potash Megastore, akin to pitting Costco against your neighborhood corner store.

I have a feeling the Summer of 2016 is going to be a big one for the Government of Saskatchewan. Transformational, you could even say – though transforming is only fun if you’re the one twisting the parts.

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