NEWSMAKER-BHP’s tenacious CEO faces third strike in Potash deal

By James Regan

SYDNEY, Nov 4 (BestGrowthStock) – Three strikes and you’re out?

For the third time in as many years, Marius Kloppers, the
South African chief of BHP Billiton, faces another setback in
his daring quest to find new avenues of growth for BHP.

The Fulbright scholar, whose idea of a good time is
watching cricket on television with his children, might have a
fight on his hands as speculation grows he may soon be forced
to go.

“For a lot of people, Potash is seen as make or break for
him because nothing big has been acquired on his watch,” said
an Australian mining executive with another company who did
want to be quoted on the record talking about Kloppers.

“Still, he guided BHP through the financial crisis with
great acumen and that’s got to count for something,” he said.

Kloppers is known for his tenacity and others who have had
dealings with him say he would go down swinging. As an
18-year-old conscript in South Africa’s war in Angola, he
reportedly carried his heat-stricken German Shepard through the
desert rather than let him die.

“The fat lady hasn’t sung yet,” said Andrew Pyle, a wealth
advisor at Scotia McLeod in Canada. “It’s not over,” Pile said
referring to BHP’s chances to keep its bid on the table.

Kloppers, 47, will be under more pressure to finally launch
a share buyback as he comes to terms with the Canadian
government’s decision on Wednesday to block BHP’s $39 billion
takeover of Potash Corp (POT.TO: ). [ID:nN03272751]
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BHP/Potash timeline: http://link.reuters.com/zew32q
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“Marius Kloppers is going to be pretty frustrated,” said
Cameron Peacock, an analyst at IG Markets in Melbourne.

The buyback is something investors have long called for and
could endear him once again with shareholders sour over
Klopper’s push to acquire the Saskatchewan fertiliser company.

“It is hard for them (BHP) to deploy their money,” Evy
Hambro, head of mining investments for BHP’s largest
shareholder, Blackrock Inc (BLK.N: ) told Reuters recently
[ID:nSGE69Q07O]. “What is available to them is their own
shares.”

Early in his tenure at the helm of BHP, a diversified
mining house known as the “Big Australian”, Kloppers launched
an audacious but ultimately mistimed play for rival Rio Tinto
(RIO.AX: ) (RIO.L: ) just before the global credit crisis hit
commodities markets in 2008.

If the deal had succeeded it would have been the
second-largest takeover in corporate history.

After that, Kloppers attempted a $116 billion merger of BHP
and rival Rio Tinto’s vast iron ore businesses, infuriating
steel mills which buy the ore and leading competition
regulators on three continents to reject it.

ONUS ON BHP

Canada blocked BHP’s bid, saying it would not benefit the
nation and offered only the slimmest of chances of accepting a
modified offer.

Ottawa has given BHP 30 days to revise the offer and show
how it would provide benefits to the country.

Some think this gives Kloppers one more swing. Others
counter the 30-day rule is a mere formality and that the deal
is dead.

In pursuing Potash, Kloppers is betting an increasingly
hungry world will pay dearly for the super-fertiliser
ingredient potash, first employed in 14th-century Ethiopia and
sought after by farmers worldwide.

About 150 countries use potash for their crops, but it is
only produced in about a dozen.

Although it has explored for potash, BHP has yet to produce
any. Potash on the other hand, commands a 20 percent share of
global potash capacity. The biggest profits in commodities come
from suppliers with the largest production runs, which is why
Kloppers is trying on Potash for size.

Kloppers, who turned vegetarian after a steady diet of fish
and meat school lunches in apartheid South Africa, criticises
developed countries for hoarding food and using sugar cane,
palm oil and other food crops to manufacture biofuels.

“I think biofuels are a selfish way for the West to placate
itself and to basically impose the cost on the developing
world,” Kloppers told the Age newspaper in Australia.

“We are making hundreds of millions of people worse off
with biofuels because it’s pushing up food prices.”
(Editing by Anshuman Daga)

NEWSMAKER-BHP’s tenacious CEO faces third strike in Potash deal