WRAPUP 3-Canadian provinces push Ottawa to block Potash bid

* Three more provinces say Ottawa should block BHP bid

* Government has until midnight Nov 3 to announce decision

* Potash raises hopes of a fresh white knight approach
(Adds comment from Clement and from aboriginal group)

By Pav Jordan and Louise Egan

TORONTO/OTTAWA, Oct 29 (BestGrowthStock) – Potash Corp’s (POT.TO: )
home province is ratcheting up pressure on the Canadian
government to block BHP Billiton’s (BHP.AX: ) hostile approach,
while the company still insists that rival bids could emerge.

Saskatchewan, where fertilizer producer Potash Corp is
based, wants Ottawa to reject the Anglo-American mining giant’s
$39 billion offer, the largest takeover bid of 2010.

It says a deal would rob Canada of a key strategic
resource, as well as cutting jobs, Saskatchewan’s tax take and
its royalty payments, and it says the provinces of Alberta,
Manitoba, New Brunswick and Quebec also oppose the bid.

Alberta, Manitoba and Saskatchewan alone account for 48 of
the 142 seats the ruling Conservatives hold in the House of
Commons, and the minority government needs those seats to stay
in power.

“How do you overcome the strategic concern? … This is
more important going forward for the country than maybe it ever
has been because the world is prizing food security and energy
security,” Saskatchewan Premier Brad Wall said in Toronto.

“Isn’t it time that we maybe got a little bit circumspect
about deals that involve this size of a reserve and this size
of a company? I guess that’s our position.”

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For other BHP-Potash stories [ID:nN22340110]

Value investor view on Potash: [ID:nRTV153281]

BHP/Potash timeline: http://link.reuters.com/zew32q

Top potash producers: http://link.reuters.com/sus55n

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Potash Corp is the world’s biggest producer of its namesake
crop nutrient, demand for which is soaring as food prices climb
and demand for fertilizers rise. It has flatly rejected BHP’s
$130 a share offer as inadequate.

Potash Corp stock was up just over 2 percent at $145.75 on
the New York Stock Exchange. The shares spiraled above BHP’s
the offer price in August, when BHP launched its bid, and have
stayed above that level, signaling that investors expect a
higher offer to emerge.

POLITICAL CHALLENGE

The issue of whether to approve the offer has become a huge
political challenge for the federal Conservative government,
which has said it would meet a legal deadline of midnight on
Nov. 3 (0400 GMT Nov. 4) to approve or block it.

In comments that appeared to make a delay highly unlikely,
federal Industry Minister Tony Clement said a decision would
come “sometime between a minute from now and midnight Nov. 3.”

If the government blocks the bid, it risks damaging
Canada’s reputation as a country that’s open to foreign
investment.

But accepting it might drive voters in Saskatchewan and in
other provinces to other parties, jeopardizing the
Conservatives’ chances of staying in power after a federal
election widely expected in the first half of 2011.

Speaking later to CPAC television, Clement said foreign
investment had traditionally been a net benefit to Canada,
bringing jobs, competition, innovation and production.

“We can’t close our borders, and nor would we want to,
because different companies may want us to export to other
countries, or invest in other countries,” he said.

“I think we have to be an open market, but at the same time
everybody should know what the rules are. The rules are net
benefit to Canada.”

A Saskatchewan aboriginal group said it saw no net benefit
from the BHP proposal, and said the federal government had a
duty to consult it. It was not clear if these consultations
would take place, or if that could delay any decision.

Polls put the Conservatives just 6 percentage points in
front of the Liberals, their main rivals, and they would lose
seats if an election were held now.

The Liberals and the left-wing New Democrats both oppose
the BHP offer.

“This is one of the principal nutrients required for food
production around the world and will be required for
generations to come,” said Ralph Goodale, the Liberals’ only
member of parliament in Saskatchewan.

“If one transaction can take that out of Canadian hands
forever, that’s a pretty strategic, pretty serious
consideration.”

Canadian government approval is far from the final stage in
the process, and the Saskatchewan Financial Services Commission
is due to hold hearings on Nov. 8 and 9 on whether to overturn
Potash shareholder rights plan.

In a filing to the commission, Potash Corp said it had
spoken with 15 strategic, financial and state-sponsored
potential bidders and investors. But in a tough market, a white
knight would need more time to raise financing, it said.

That slightly strengthened a message that the company has
beamed out many times already, but at least one leading
Canadian investment banker remained skeptical.

“We’re still waiting for them to show up,” said the banker,
who asked not to be identified.
(Additional reporting by Rod Nickel; writing by David
Ljunggren; editing by Janet Guttsman, Gary Hill)

WRAPUP 3-Canadian provinces push Ottawa to block Potash bid