Saskatchewan to issue unfavorable review of Potash bid

WINNIPEG, Manitoba (BestGrowthStock) – Saskatchewan will give an unfavorable review of BHP Billiton’s (BHP.AX: ) hostile takeover bid for Potash Corp (POT.TO: ) after talks between the Canadian province and Ango-Australian miner broke down, a source familiar with the matter said.

Saskatchewan, where Potash Corp, the world’s top fertilizer producer is based, will play a key advisory role as the Canadian government decides whether to approve BHP’s $39 billion bid, or any other that may emerge.

A spokeswoman for Saskatchewan Premier Brad Wall said earlier on Tuesday that he will speak on the bid on Thursday in the provincial capital of Regina. Government officials were not available later for comment on talks breaking down with BHP.

Wall will outline the government’s response to a report it received earlier this month from the Conference Board of Canada on the possible impact of a BHP takeover of Potash Corp. It will also frame Saskatchewan’s recommendations to the federal government, the spokeswoman said.

Ottawa has said it will consider Saskatchewan’s views carefully as it determines if the bid is of net benefit to Canada. Ottawa’s deadline for its review is November 3.

Saskatchewan politicians have said they don’t see a net benefit from a BHP takeover. They have raised concerns about losing some of the corporate taxes and price-sensitive royalties the province collects from the production of potash, a key crop nutrient, if BHP changes the way Potash Corp produces and markets the fertilizer.

The Saskatchewan government sought to negotiate commitments from BHP that would ease those concerns, however those talks failed, the source familiar with the matter said.

The Conference Board’s report warned Saskatchewan against opposing BHP’s bid, even though it said it could cost the province as much as C$5.7 billion ($5.5 billion) under current tax rules if BHP acquires Potash, maximizes production and develops its own Jansen project in Saskatchewan.

(Reporting by Rod Nickel and Euan Rocha; editing by Peter Galloway, Rob Wilson and Sofina Mirza-Reid)

Saskatchewan to issue unfavorable review of Potash bid