Russian PotashCorp suitor seeks talks

A Russian fertilizer company wants to meet with Potash Corporation of Saskatchewan and Canadian government officials to discuss the possibility of a takeover bid for the Canadian fertilizer firm.

Moscow-based OAO PhosAgro said earlier this month it was investigating the possibility of linking up with Russian and Canadian partners and banks to launch an acquisition bid for PotashCorp.

On Tuesday, the company issued a statement saying it intends to hold talks with "all relevant parties, including the Canadian government" about the feasibility of a takeover.

Moscow has reportedly been pushing a number of Russian mining and agri-businesses to work together on an offer for Potash.

One stumbling block could be the size discrepancy between the two companies. Moscow-based brokerage Troika Dialog puts PhosAgro's value at between $7 billion and $9 billion US. At current prices, PotashCorp's market capitalization is more than $40 billion US.

BHP Billiton of Australia had been pursuing Potash in a $40-billion US hostile takeover but withdrew its offer Sunday after the Canadian government vetoed the deal for failing the "net benefit" test under the Investment Canada Act.

BHP responds

BHP told shareholders at its annual general meeting Tuesday that a rise of protectionism won't deter it from pursuing other acquisition opportunities worldwide.

"The world is changing, whether you want to call it protectionism or nationalism," BHP chair Jac Nasser said. In formally withdrawing the offer for PotashCorp on Sunday, CEO Marius Kloppers reiterated his company's commitment to future opportunities in potash and other commodities.

"We remain committed to Canada and we plan to develop a significant presence in the potash industry in Saskatchewan. As part of those plans, we will continue to progress our Jansen Project and other development opportunities," Kloppers said. 

Far from scaling back after being rebuffed by Potash, Nasser said there are many opportunities around the world for large-scale resource projects.

The company will continue to pursue such opportunities in countries that have "flexible labour regimes, efficient business regulation and, importantly, a stable and fair tax system."

In the last five years, BHP Billiton has invested more than $31 billion Cdn in growing its existing assets. It also has 20 growth initiatives in the planning stages and expects to spend the equivalent of $15 billion Cdn this year on capital expenditures.

The company has spent nearly $1 billion Cdn in fees and penalties on three major takeovers it has failed to close since the start of 2009.