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| BHP has been cold-calling customers: Potash |
| Bloomberg / Melbourne Sep 01, 2010, 00:21 IST |
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Potash Corp of Saskatchewan Inc said BHP Billiton Ltd has been cold-calling some of its customers in bid to “undermine” the world’s biggest fertiliser maker as part of a $40 billion hostile takeover bid.
“We can only assume that BHP Billiton’s purpose is to sow seeds of doubt and confusion about the future of Potash Corp,” the Canadian company said yesterday in a letter to customers, lodged in a regulatory filing. “We consider this contact to be inappropriate and highly unethical.” BHP spokeswoman Fiona Martin said she wasn’t immediately able to comment.
Potash Corp Chief Executive Officer Bill Doyle rejected this month’s $130-a-share bid from BHP, the world’s largest mining company, and is seeking other offers. BHP wants to make the acquisition to diversify sales and benefit from surging demand for fertiliser as food needs grow.
“It’s a move by BHP to try and get some action happening,” Peter Rudd, director of mining and resources at Balnave Capital Group, said in Melbourne. “It would be a coordinated action and one of a number they’d be adopting, including presumably talking to major shareholders. This is a sign that BHP are serious.”
BHP declined 2.2 per cent to A$37.05 at the 4.10 pm Sydney time close on the Australian stock exchange. Melbourne-based BHP could afford to pay as much as $180 a share for the Saskatoon, Saskatchewan-based fertilizer producer, Morgan Stanley said.
‘Undermine efforts’
“We are disappointed that BHP would attempt to undermine our efforts to serve you,” Potash Corp said in the letter dated August 30 and signed by Stephen Dowdle. In a PRN newswire release on May 26 this year, Stephen F Dowdle was named as president of PCS sales at Potash Corp.
BHP’s Chris Ryder, director of potash marketing, has begun calling customers, Potash Corp said in the letter. BHP is studying development its own Jansen potash mine in Canada that may produce 8 million metric tonnes a year when it starts output.
BHP’s takeover bid may face an obstacle in the shape of Canpotex Limited.
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