BHP confident of Potash takeover

[Alta4ever]

Not a fan of the idea. At this rate, there won't be any Canadian owned companies. It will all be owned by foreigners who don't really care about the average Canadian. The money is going out, not coming in.

The two biggest mining companies in Canada are now foreign owned.

You do realize that there is already massive american ownership in the potash mines now right?

[nicky10013]

Tough being between a rock and a hard place. Will Harper do what his ideology says is correct or what the people want?

Mr. Haskayne says a green light for the Anglo-Australian BHP to take over Potash would be wrenching for Canada, where three provincial governments have already joined Saskatchewan Premier Brad Wall in opposing the deal.

“It's going to be as divisive as the NEP,” Mr. Haskayne said, referring to the interventionist 1980 National Energy Program that infuriated Albertans.

http://www.theglobeandmail.com/news/politics/hometown-opposition-to-potash-takeover-puts-harper-in-bind/article1782642/

[wyly]

Tough being between a rock and a hard place. Will Harper do what his ideology says is correct or what the people want?

http://www.theglobeandmail.com/news/politics/hometown-opposition-to-potash-takeover-puts-harper-in-bind/article1782642/

politcally he should stop it and be the hero, the conservative hardcore that would oppose intervention has nowhere else to park their vote so piss them off and be the hero to Sask voters...pissing off Sask voters that have no problem switching their vote from conservative to NDP or Liberal isn't the smart move..

[Evening Star]

I'm the only one who kind of feels like Potash should be renationalized, right?

[Alta4ever]

I'm the only one who kind of feels like Potash should be renationalized, right?

Just like oil too right?

Bloody socialists.

[Evening Star]

Actually, yeah, kind of.

[Alta4ever]

Actually, yeah, kind of.

Go back to the animal farm.

[Evening Star]

Ha. I'm being a little half-serious here - although publicly owned oil does seems to be working in Norway. My understanding of resource economics is pretty superficial. I enjoyed the Grant Devine interview in any case!

[wyly]

Ha. I'm being a little half-serious here - although publicly owned oil does seems to be working in Norway. My understanding of resource economics is pretty superficial. I enjoyed the Grant Devine interview in any case!

Devine!...Sask was happy to the end of that idiot and his assorted band of conservative criminals, bloody near bankrupt the province...anything Devine has to say is worth shit IMO...

[wyly]

Ha. I'm being a little half-serious here - although publicly owned oil does seems to be working in Norway. My understanding of resource economics is pretty superficial. I enjoyed the Grant Devine interview in any case!

Norwegians will reap the benefit of their rainy day Petroleum Fund when the oil runs out, it's valued at $513 billion and in 2014 could near $800 billion...alberta's heritage fund $13 billion

[blueblood]

Some people do not see the forest for the trees here...

1) Any Sask. politician worth his stripes would be opposed to this. Sask. people love their "Sask. companies" Given that Sask. people have political bi polar syndrome, this could be a huge election issue down the road. Had BHP bought a pile of potash shares without the intent of the hostile takeover, they could have popped some directors on the board and for all intents and purposes ran the company and the people of Sask. would have been none the wiser.

2) As an investor I don't like the deal because it is grossly undervalued. Having control of that much potash with corn/soybean prices on an uptrend along with potash prices on an uptrend. 40 billion doesn't cut it. 160-200 per share sounds more reasonable.

3) Where are the Canadian investors? If BHP is proposing 40 billion, why isn't a consortium of Canadian investors stepping up to the plate if it is such a big deal?

4) Better a company that is buying that could pay uncle Blueblood a nice juicy dividend. Far better than nationalizing or Cargill buying it which pays me diddly squat.

5) The potash is in the ground and in Sask. Jobs and tax revenue aren't going anywhere

6) Privatizing Potashcorp has made the SK gov't far more money than a crown corp. Not only that the valuation has gone from a 100 million dollars to 40 billion+. That and BHP has billions upon billions of cash and an extremely large market cap to finance expansion. There isn't a chance in hell governments can finance operations like that without serious political backlash. Financial institutions/investments/publically traded companies are far more suited to that sort of thing than governments are.

7) I can see Harper nixing this deal in spite of all the positives, the political consequences aren't worth giving the OK. Eg. taxing income trusts and nixing the takeover of a Canadian space tech company.

[William Ashley]

2) As an investor I don't like the deal because it is grossly undervalued. Having control of that much potash with corn/soybean prices on an uptrend along with potash prices on an uptrend. 40 billion doesn't cut it. 160-200 per share sounds more reasonable.

165 is the mark that is a go. or about $25 a share gain.

3) Where are the Canadian investors? If BHP is proposing 40 billion, why isn't a consortium of Canadian investors stepping up to the plate if it is such a big deal?

BHP is about half Canadian owned - the other half is American - BHP also has a strong American punch -(Morgan Chase and Sachs - BIG US BANKS that comprise part of the US federal reserve system- it is "VERY GLOBAL" - but also very American as far as directors go - it is tied in with the US resource creed - oil and other minerals - and we know from the record they would totally down POTASH if it ment better performance on their business overall - and that includes the banks return overall most likely. POT has a couple long time company people - since the days when it was a crown corp and having ties with the Canadian system - but I don't know them personally - it is not any assurance that the board would be maintained within the holdings company or who they would seek to remove as managing directors - the clear thing here is that this company would loose a lot of Canadian shareholders - the question is how much of BHP is Canadian owned)

Oh and there was one major consortium that was composed of natives and some other stakeholders...

5) The potash is in the ground and in Sask. Jobs and tax revenue aren't going anywhere

SUPPLY AND DEMAND - AND PRICE -- the company has no requirement to increase or maintain production under the stipulations are very limited. Thus there are no assurance such as US Steel - even though they were ignored anyway - this one sounds more like the government is saying put it upfront we arn't suing you after the fact.

6) Privatizing Potashcorp has made the SK gov't far more money than a crown corp. Not only that the valuation has gone from a 100 million dollars to 40 billion+.

This is good in a market sense but how much is 40% of the worlds potash actually worth? Not how much is the company mining it worth - and where is the money going - to Canadians or to people outside Canada? Also as a holdings company it is an asset not a company.

The government stands to make whatever capital gains on 20 billion (since only about half of that 40 billion goes to Canada the other half goes to the states) - who are the Shareholders of BHP because they are the ones in their countries that hold that wealth at that point not Canada. It is a good shorterm deal for Canada but the "actually future" flow of money is what remains unknown --- the hwole borrow and spend , sell and spend thing is all good if it actually creates a revenue stream - simply creating spending money that doesn't come back is called gravedigging. You need ROI.

The fact this company was sold for 100 million and is rendered at 40 billion today only goes to show that perhaps it was an error on the part of SASK to privatize the way it did--- how much does it own today?

http://www.grist.org/article/2010-02-11-tracking-u.s.-farmers-supply-nitrogen-fertilizer

http://www.tfi.org/factsandstats/fertilizer.cfm

What is under the potash?

Edited November 3, 2010 by William Ashley

[M.Dancer]

5) The potash is in the ground and in Sask. Jobs and tax revenue aren't going anywhere

The vast majority of jobs anyway will stay....

Sales, Executive admin, investor relations will be moved..

[wyly]

The fact this company was sold for 100 million and is rendered at 40 billion today only goes to show that perhaps it was an error on the part of SASK to privatize the way it did--- how much does it own today?

that would be the dispised Grant Devine conservative government that sold it...

[Jerry J. Fortin]

Norwegians will reap the benefit of their rainy day Petroleum Fund when the oil runs out, it's valued at $513 billion and in 2014 could near $800 billion...alberta's heritage fund $13 billion

Anybody know where all of these "heritage funds" came from. If you don't know, I think you will be pleasantly surprised.

[Topaz]

It will be interesting to se which way Harper goes on this...concern over foreign investments OR the Tory party, and what will be left of it after the election in Sask.

[M.Dancer]

I am disappointed in the Conservatives committment to property rights, shareholder rights and business in general.

[Topaz]

For now, Harper seems more worried about the Tory party than foreign investments BUT they left a 30 days open to keep the talking going.

[capricorn]

For now, Harper seems more worried about the Tory party than foreign investments

Topaz I'm sure you know that politicians almost always do what's best for their party, and politicians in power want to remain in power. No surprise there.

BUT they left a 30 days open to keep the talking going.

Because that's what the legislation mandates.

However, the Industry Minister said BHP had 30 days to resubmit an offer that would meet Ottawa’s criteria to deliver a “net benefit” to Canada. The 30-day period is stipulated in the Investment Canada Act.

http://www.edmontonjournal.com/business/Ottawa+rejects+Potash+takeover/3772395/story.html?cid=megadrop_story

The 30 days provides room for negotiations that might lead to a deal acceptable to Saskatchewan, that satisfies the yardsticks set by Industry Canada and that might be palatable for Canadians in general.

It does look like the Conservatives were in a no-win situation. Agree to the deal and they're accused of selling off Canada's natural resources or say no to the deal and be accused of burying your principles for political gain. What to do.

[Evening Star]

A part of me is a little disappointed too. I was hoping they'd give their SK seats to the NDP.

[ToadBrother]

For now, Harper seems more worried about the Tory party than foreign investments BUT they left a 30 days open to keep the talking going.

Just remember, a governing party's only real commitment is towards re-election. As much as I think this was a bad decision that is going to discredit Canada as far as many foreign investors are concerned, I can't say I'm at all surprised. It was a choice between good business and getting a severe smackdown in Saskatchewan. There are not a lot of Prime Ministers in our history who have been willing to lop off their right nut to make the right decision.

[ironstone]

I agree that allowing BHP this takeover bid is bad for Canada overall,but I was wondering if or how many examples there are of Canadian companies with similar deals in which they profit enormously from developing countries.How important are the concerns of the people in those countries for their resources compared to Canadian profits?

[blueblood]

I agree that allowing BHP this takeover bid is bad for Canada overall,but I was wondering if or how many examples there are of Canadian companies with similar deals in which they profit enormously from developing countries.How important are the concerns of the people in those countries for their resources compared to Canadian profits?

Viterra and Agrium in Australia. Can you say a significant portion of the Aussie grain trade is now in Canadian publically traded company hands. THe concerns of the Aussies were a mere pitance.

Viterra's Australian acquisition saved its bottom line this year.

The fact this company was sold for 100 million and is rendered at 40 billion today only goes to show that perhaps it was an error on the part of SASK to privatize the way it did--- how much does it own today?

This quote is why business classes should be taught at the high school level, and mandatory. When the company was privatized and became publically traded, that allowed for the opportunity to raise funds on a massive scale. If the gov't of Sask. spent the kind of money that was raised from the stock market on Potash mines, the gov't would be tossed out of office for "wasteful spending". The gov't of Sask I think still has shares, not full blown control.

-Wall and clement had to block the sale, their skins depended on it. The thing to remember is that BHP can afford to shut the mines down if Potash prices fall, Potashcorp can't. However, a smart investor would snap up BHP shares if in the event this deal went through which it did not.

One thing is for sure, it will take a lot longer to develop potash reserves without BHP involved, which will piss shareholders off.

The 25 billion first nation consortium is a joke. As far as BHP is concerned that's pocket change.

Canadians are poorer because of this for the sake of preserving miner's jobs.

Edited November 4, 2010 by blueblood

[Keepitsimple]

After calling for the Feds to reject the deal, the opposition predictably tried to continue bashing them....Ignatieff by saying they should ignore the 30 day period prescribed BY LAW and simply refuse to allow BHP to re-apply......and Layton standing nest to the Saskatchewan NDP opposition leader who said we should nationalize resource companies by having mandatory provincial share ownership.......Ignatieff and Layton both looked like whining fools who simply didn't know what they were talking about.

[M.Dancer]

and Layton standing nest to the Saskatchewan NDP opposition leader who said we should nationalize resource companies by having mandatory provincial share ownership

|Good to see layton show is socialist/intervetionist side...