Companies
Sinochem in race for Potash after BHP bid rejected
(China Daily)
Updated: 2010-08-24 09:33
 |
Large Medium Small |
|
 |
|
Signage posted outside the Potash Corp of Saskatchewan Inc's nitrogen and phosphate processing facility in Geismar, Louisiana, United States. Derick E. Hingle / Bloomberg |
NEW YORK - Potash Corp of Saskatchewan Inc was contacted by China's Sinochem Group and Brazil's Vale SA during the weekend about the possibility of holding talks, even as the Canadian company on Monday rejected a hostile takeover bid from BHP Billiton Ltd, said a person with knowledge of the matter.
Potash Corp has formally rejected a hostile takeover from BHP Billiton, adding it was exploring other offers, media reports said on Monday.
Other companies have also contacted the board of directors of the world's biggest fertilizer producer, Potash Corp, and talks may not materialize, the person said.
Any bidder could go up against BHP, which took its $39 billion offer to shareholders last week after the Canadian company rejected an initial approach.
State-owned Sinochem's interest would indicate China's desire to stop BHP from controlling more supplies to the world's biggest consumer of commodities after years of price tensions over iron ore.
Potash is a form of potassium mined in Canada, Brazil, Germany and the United States, and used to help boost crop yields by improving the ability of plants to withstand dry soil conditions.
'Closely watching'
"We are closely watching BHP Billiton's bid for Potash Corp," Li Qiang, head of the president's office at Sinochem, said by telephone from Beijing.
"This is big news for the industry and it's only natural that everyone is looking at it. I cannot verify that Sinochem and Potash have been in any form of contact." Sinochem is China's biggest chemical and fertilizer trader.
Potash said in a statement that the bid made by the Anglo-Australian miner direct to its shareholders last week was "wholly inadequate" and stressed that "superior offers or other alternatives are expected to emerge".
The statement added: "Potash Corp has been approached by, and has initiated contact with, a number of third parties who have expressed an interest in considering alternative transactions.
"Discussions are being pursued with several of these third parties in order to generate value enhancing alternatives."
Fatima Cristina, a spokeswoman for Rio de Janeiro-based Vale, and Bill Johnson, a spokesman for Saskatoon, Saskatchewan-based Potash, also declined to comment. Kelly Quirke, a spokeswoman at Melbourne-based BHP, declined to comment.
| ||||
"The growth of China's potash demand in the long run will exceed the expansion of its own production," said Xu Hongzhi, an analyst at Beijing Orient Agribusiness Consultant Co.
China is the world's largest user of potassium fertilizer and is the second-biggest importer of potash after India. Sinochem Group is listed as a key State-owned company under the nation's State-owned Assets Supervision and Administration Commission of the State Council.
The group, incorporated in 1950, posted a record gross profit of 8.7 billion yuan ($1.3 billion) in 2008 on sales of 300 billion yuan, according to the latest information on its website.
Agencies