BHP confident of Potash takeover

[Wilber]

The stuff is still there. If it is that important to the world's economy, there will always be people who want to get their hands on it.

Doubt it's the case in this transaction but shareholder value is not the be all and end all. There are plenty of examples of viable companies being taken over by vulture funds, dismantled and their assets sold off in order to maximize "shareholder value".

[DrGreenthumb]

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

Just like the dispised Filmon Conservative government sold the people's telephone system? Just like Screwy Hughy McFayden would sell the people's Manitoba Hydro if Manitobans were ever stupid enough to vote in another Conservative crook government?

[blueblood]

Just like the dispised Filmon Conservative government sold the people's telephone system? Just like Screwy Hughy McFayden would sell the people's Manitoba Hydro if Manitobans were ever stupid enough to vote in another Conservative crook government?

Oh Stop The Madness!!!

Do you even know what a publically traded company is? MTS is a far better, far more competitive company than it was before. This is what happens when you take a company to the TSX, the ability to quickly raise capital for expansion and improved services.

Manitoba Hydro becoming a publically traded company would be a boon to the province, and Manitobans would be richer for it. The royalties and taxes collected from a private Hydro company would exceed the income from the stagnant albatross MB Hydro is today. The royalties would be in perpetuity. BC has private companies developing hydro electricity, and shareholders are going to benefit from that. The only people that benefit from MB Hydro being a crown corp are its lazy workers with their cadillac pensions paid for by soaking Manitobans.

I hate being right all the time, it's such a burden. Just repeat what I have to say and you can be right too.

[Evening Star]

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

As opposed to his laissez-faire, neoliberal side...?

[August1991]

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.

Provincial governments own (can tax, impose whatever royalty they want on) Canada's natural resources.

GostHacked, have you read the BNA Act?

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

Gimme a break. In a simple sense, that's how Brad Wall has portrayed this - and you would like to believe.

[irony]Brad Wall, defender of ordinary Canadians. Stephen Harper, inhuman control freak.[/irony]

The truth, as usual, is more - nuanced.

----

Wyly, your post makes me go out on a limb.

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

If you trust in State control of natural resources, I hope that you are old so you'll receive the pension soon. If you are young, and you are expecting a State pension in 50 years (around 2060 or so...), I'd trust another institution.

The Soviet Union centrally managed Russia's phenomenal natural resources, and at first it worked. Then, it didn't.

Or how about Indonesia, or even Saudi Arabia. Norway will go the same way. Look at Nigeria. It's a question of time. (Norwegians and Albertans might strenuously object but I would point to the example of Tiger Woods. The mess is inevitable. When property rights to a natural resource/talent are not clearly defined, there is eventually a mess. e.g. Charlie Sheen. The Hollywood version of Saskatchewan potash.)

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.

Agreed. Wall, for his own reasons, has wrapped himself in a Canadian flag.

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?

Would some please define to me a Canadian investor?

Is Conrad Black a Canadian investor? Paul Desmarais? What planet are you people living on?

2) As an investor I don't like the deal because it is grossly undervalued.

As an investor, if you don't like the shares, sell them. Edited November 4, 2010 by August1991

[August1991]

I was curious about Brad Wall's argument so I checked it out.

He has a point. It's Canpotex, Saskatchewan's OPEC.

I reckon that the people in Canpotex are paying off Wall, or his party. (It happens.)

But aside from political bribes, in this case, it may make sense. Saskatchewan governments (Wall, Blakeney, et al) have the power to allow Canpotex to raise the world price of potash, and with the profits, it pays off Wall, Blakeney etc - and Saskatchewan taxpayers. That includes right wing, free trader, dog show, libertarian people like Kate McMillan.

Saskatchewan has a lot of potash. I can understand the Saskatchewan desire to price discriminate. I suspect that Kate McMillan does this in her painting business.

----

As a Quebecer, a North American, a civilized person - I am a opposed to such practices.

Edited November 4, 2010 by August1991

[Bryan]

Just like the dispised Filmon Conservative government sold the people's telephone system? Just like Screwy Hughy McFayden would sell the people's Manitoba Hydro if Manitobans were ever stupid enough to vote in another Conservative crook government?

McFadyen has not shown any interest in selling Hydro. He's certainly never claimed he would.

The problem is, the NDP have taken what was a tremendously profitable resource under the previous PC govt, and turned it into an anchor. The NDP bled it dry so that they could pretend that they weren't really running deficits. Instead of Provincial budget deficits, now we have Hydro in huge debt. It was only once they ruined Hydro's financial position that they started showing those losses on the provincial books. Regardless of who's in power, we may have no choice but to sell Hydro now.

I hear you on MTS though. The prices for phone service in Manitoba have gone through the roof since the sale. Competition has been a very bad thing for Manitobans in that respect. I'm paying more than triple for my phone service now compared to when the sale went through.

[William Ashley]

Well that is done...

..... I wonder how much stock they had - apparently they want to recoupe the 25 billion capital they put in.............

SELL SELL SELL .. or is it a classic post waterloo tactic for cheap stock at a low rate? I wanna see what happens to this when the markets in NY and TO open..

It is actually trading up from yesterday..

Edited November 4, 2010 by William Ashley

[blueblood]

Would some please define to me a Canadian investor?

Is Conrad Black a Canadian investor? Paul Desmarais? What planet are you people living on?

Funds, individuals, companies with Canadian ties. You are correct about the technicalities of who is a Canadian investor, it's all optics.

As an investor, if you don't like the shares, sell them.

As an investor I have every right to vote which way I want potential deals to go. As a greedy person, this deal didn't make sense. I like Potash Shares because of the nice juicy dividend. I didn't like the bid of 130$ per share considering the growth projections of Potash down the road.

As a Quebecer, a North American, a civilized person - I am a opposed to such practices.

You are free to buy shares in Potash Corp or BHP if publically traded companies are in a position to make a boat load of cash. THese companies are owned by many individuals and they have a duty to those many individuals to provide them a return on investment. This is where greed is our friend.

I hear you on MTS though. The prices for phone service in Manitoba have gone through the roof since the sale. Competition has been a very bad thing for Manitobans in that respect. I'm paying more than triple for my phone service now compared to when the sale went through.

1) Sasktel which is a crown corp offers similar prices for service as MTS. Which is similar prices as the other guys. That is a CRTC over regulation problem, not an MTS problem. I would love for the CRTC to be done away with so companies like Verizon and AT&T can come in provide better service for lower costs and send those dinosaur Canadian phone companies to the dust bin.

2) If MTS is soaking you, buy MTS shares and help control costs that way. That's the beauty of a private company, you can enjoy the party. With a crown corp you can't.

[Smallc]

That's the beauty of a private company, you can enjoy the party. With a crown corp you can't.

What? The very idea behind a Crown corporation is that everyone enjoy the benefits. For example, we all benefit from the dividends that Hydro pays the government, as well as what are the lowest electricity prices on the continent. How are we not, "enjoying the party"? Hydro is not in a bad position at all. They have debt because they have taken on many projects that will bring them revenue in the future. KPMG saw no problems with the way things were. All Manitobans benefit because we all own a piece of Manitoba Hydro. You said earlier that the government raided Hydro's coffers. Well, that isn't true at all. The money belongs to the people of Manitoba. The government spending it on their behalf is perfectly acceptable.

[Jack Weber]

Sometimes national economic sovreignty trumps shareholder demands...

This is one of those times the neoliberal types are just going to have realize this fact...

[blueblood]

What? The very idea behind a Crown corporation is that everyone enjoy the benefits. For example, we all benefit from the dividends that Hydro pays the government, as well as what are the lowest electricity prices on the continent. How are we not, "enjoying the party"? Hydro is not in a bad position at all. They have debt because they have taken on many projects that will bring them revenue in the future. KPMG saw no problems with the way things were. All Manitobans benefit because we all own a piece of Manitoba Hydro. You said earlier that the government raided Hydro's coffers. Well, that isn't true at all. The money belongs to the people of Manitoba. The government spending it on their behalf is perfectly acceptable.

When Potashcorp was privatized it was valued at 100 million dollars. Now it is valued at minimum 40 billion dollars. Brad Wall has stated that since Potashcorp was privatized, there has been moremoney flowing into the government coffers (which is bad btw). Why has Potashcorp grown like that? Because of the ability to raise significant funds by being a publically traded company. MB Hydro cannot generate that kind of money for the kind of growth Potashcorp experienced because it's a crown corp that answers to some bureaucrat behind a desk who doesn't know their head from their ass when it comes to business. Not only that MB Hydro is wasting a fortune with this Bipole III down the West side of Lake Winnipeg. No private company would be stupid enough to do that.

Sask people are in a far better situation than Manitoba people. Not only is there more money in the gov't coffers to spend on roads and other crap like that, the sask people smart enough to invest in Potashcorp have a gem of an investment vehicle and get paid just for having their money in the company. To compare the wealth situation of citizens of MB and SK in regards to MB Hydro to Potashcorp is ridiculous.

If MB Hydro was privatized and became publically traded, there would be more money going to the gov't (shudder), the ability to rapidly raise capital for future projects and expansion, and an investment vehicle to improve the financial situation of Manitobans smart enough to invest in it.

BC lets private companies build power dams, why not Manitoba? Manitobans and Canadians in general are poorer because of this.

[wyly]

Sometimes national economic sovreignty trumps shareholder demands...

This is one of those times the neoliberal types are just going to have realize this fact...

realistically it has nothing to do with national economic sovereignty and everything to do with glorious leader losing 13 seats in the next election...does it make any difference if the new owner is australian instead of the americans now in charge?

[August1991]

realistically it has nothing to do with national economic sovereignty and everything to do with glorious leader losing 13 seats in the next election...does it make any difference if the new owner is australian instead of the americans now in charge?

Glorious leader?

The basic issue came down to the survival of the cartel controlling the world potash supply. Canpotex and Saskatchewan are to potash what OPEC and Saudi Arabi are to oil.

If the BHP deal had gone through, there is good reason to believe that the Canpotex cartel would have collapsed. The Saskatchewan government prefers the cartel because it means higher world prices for potash, and higher royalty payments. These royalties come from farmers around the world who pay higher prices for fertilizer than they would if teh cartel didn't exist.

Incidentally, Quebec has a similar cartel arrangement for the export/local sale of maple syrup. (Canada produces about 85% of the world's maple syrup and about 30% of the world's potash.)

----

Politicians love to impose taxes on people who can't vote so I certainly understand why Brad Wall was so opposed to this deal. The potash cartel in effect is like a tax on foreign farmers paid to the Saskatchewan government.

Edited November 5, 2010 by August1991

[Smallc]

When Potashcorp was privatized it was valued at 100 million dollars. Now it is valued at minimum 40 billion dollars. Brad Wall has stated that since Potashcorp was privatized, there has been moremoney flowing into the government coffers (which is bad btw). Why has Potashcorp grown like that? Because of the ability to raise significant funds by being a publically traded company. MB Hydro cannot generate that kind of money for the kind of growth Potashcorp experienced because it's a crown corp that answers to some bureaucrat behind a desk who doesn't know their head from their ass when it comes to business. Not only that MB Hydro is wasting a fortune with this Bipole III down the West side of Lake Winnipeg. No private company would be stupid enough to do that.

First, potash and water power are very different things. Manitoba doesn't have a monopoly on hydro power, and hydro power doesn't make as much money as something like potash. There is no way that it would expand in the same way. Money is being spent left and right on new generating projects. It couldn't get bigger any faster. As for bipole 3....well, you'd run it down the west side of the province (not lake Winnipeg) if you didn't want to give up all of your profit to the reserves that exist there.

Sask people are in a far better situation than Manitoba people. Not only is there more money in the gov't coffers to spend on roads and other crap like that, the sask people smart enough to invest in Potashcorp have a gem of an investment vehicle and get paid just for having their money in the company. To compare the wealth situation of citizens of MB and SK in regards to MB Hydro to Potashcorp is ridiculous.

It is ridiculous...and you're the only one doing the comparison. Manitoba doesn't have the same type of money making resources in large quantities (potash and oil). Water generated power isn't the same kind of money maker.

If MB Hydro was privatized and became publically traded, there would be more money going to the gov't (shudder), the ability to rapidly raise capital for future projects and expansion, and an investment vehicle to improve the financial situation of Manitobans smart enough to invest in it.

Proof would be wonderful. The biggest hydro power producer in the world, Hydro Quebec, is government owned, and doesn't produce the kind of profit that potash does. Why? Because there isn't that kind of money in hydro. Manitoba Hydro seems to have no trouble raising capital, as they are currently undertaking at least 6 large projects (Wuskwatin, Conowapa, Keeyask, Riel, Bipole III, and the St. Joseph Wind Farm).

BC lets private companies build power dams, why not Manitoba?

Private companies do build dams in Manitoba.

Manitobans and Canadians in general are poorer because of this.

Again, proof.

[Evening Star]

W moremoney flowing into the government coffers (which is bad btw).

Why is that bad?

[Bryan]

Sasktel which is a crown corp offers similar prices for service as MTS. Which is similar prices as the other guys.

Have Sasktel's residential rates tripled in the last 10 years?

[blueblood]

First, potash and water power are very different things. Manitoba doesn't have a monopoly on hydro power, and hydro power doesn't make as much money as something like potash. There is no way that it would expand in the same way. Money is being spent left and right on new generating projects. It couldn't get bigger any faster. As for bipole 3....well, you'd run it down the west side of the province (not lake Winnipeg) if you didn't want to give up all of your profit to the reserves that exist there.

You are the one trumpeting how crown corporations are the best thing since sliced bread. The sheer growth of Potashcorp since becoming privatized is proof of how publically traded companies are far more efficient than crown corps. Considering the energy consumption of Ontario and our friends to the south, having MB hydro privatized would ensure a much more rapid growth. By your logic, the oil sands should be all under crown control because a crown corp is the fastest and most efficient way to develop resources. As for Bipole 3, if you think reserves are stupid enough to gouge a privately run hydro company for running a line down there, that's madness. Do reserves in Alberta and Sask take all the profit out of pipeline, oil, and gas companies? Didn't think so.

It is ridiculous...and you're the only one doing the comparison. Manitoba doesn't have the same type of money making resources in large quantities (potash and oil). Water generated power isn't the same kind of money maker.

We aren't talking about the resources, we're talking about how best to extract them. Publically traded companies are the best way to do it.

Proof would be wonderful. The biggest hydro power producer in the world, Hydro Quebec, is government owned, and doesn't produce the kind of profit that potash does. Why? Because there isn't that kind of money in hydro. Manitoba Hydro seems to have no trouble raising capital, as they are currently undertaking at least 6 large projects (Wuskwatin, Conowapa, Keeyask, Riel, Bipole III, and the St. Joseph Wind Farm).

Are you serious? Why are crown corporations throughout Canada during history being privatized? Potashcorp has gone from a valuation of 100 million to over 40 billion. You don't get that kind of growth from being a crown corp and having to increase taxes, mooch off other provinces, and take on a ridiculous debt to achieve growth. Shall we get into the amount of projects that publically traded companies have on the go?

Private companies do build dams in Manitoba.

Do private companies own them?

Do you see ads on BNN looking for investors to invest in Manitoba dams?

Again, proof.

100 million dollar valuation to 40 billion dollars.

Brad Wall and Grant Devine have stated numerous times, that since Potashcorp went private the government has earned more money and Saskatchewan Potashcorp shareholders have a gem of a stock in their portfolio which pays out a dividend (that is getting a check in the mail when dividends are issued just for having money in the company).

I hate being right its such a burden.

To Bryan:

Have Sasktel's residential rates tripled in the last 10 years?

Can you invest in Sasktel?

[Smallc]

You are the one trumpeting how crown corporations are the best thing since sliced bread. The sheer growth of Potashcorp since becoming privatized is proof of how publically traded companies are far more efficient than crown corps. Considering the energy consumption of Ontario and our friends to the south, having MB hydro privatized would ensure a much more rapid growth.

I didn't argue that Crown corporations where the best way to do things. I'm not convinced that privatization is always the best answer. If it means that Manitobans have to pay higher taxes elsewhere (and there's more proving that than the opposite), then I'm not in favour. Unlike you, I'm not driven by a strict ideology on these matters.

By your logic, the oil sands should be all under crown control because a crown corp is the fastest and most efficient way to develop resources.

Really, explain why you thing that.

As for Bipole 3, if you think reserves are stupid enough to gouge a privately run hydro company for running a line down there, that's madness.

I'm not sure you know what you're talking about. Reservers have to be compensated for business on their land.

Do reserves in Alberta and Sask take all the profit out of pipeline, oil, and gas companies? Didn't think so.

They take a great deal of it...and there is far more profit to go around in that case.

We aren't talking about the resources, we're talking about how best to extract them. Publically traded companies are the best way to do it.

In most cases, I don't disagree.

Are you serious? Why are crown corporations throughout Canada during history being privatized? Potashcorp has gone from a valuation of 100 million to over 40 billion. You don't get that kind of growth from being a crown corp and having to increase taxes, mooch off other provinces, and take on a ridiculous debt to achieve growth. Shall we get into the amount of projects that publically traded companies have on the go?

I'm not sure of your point here. My only point is that privatization is not always the answer, and that Manitoba Hydro seems to have little problem obtaining capital.

Do private companies own them?

Do you see ads on BNN looking for investors to invest in Manitoba dams?

Why is that always the best solution? Have you looked at the per capita GDP numbers of Manitoba vs BC? They aren't that different.

100 million dollar valuation to 40 billion dollars.

Brad Wall and Grant Devine have stated numerous times, that since Potashcorp went private the government has earned more money and Saskatchewan Potashcorp shareholders have a gem of a stock in their portfolio which pays out a dividend (that is getting a check in the mail when dividends are issued just for having money in the company).

I hate being right its such a burden.

You are arguing about two cases that aren't even closely related. You have no proof for any of your assertion, and you are simply sticking to your ideology....and so I see no reason to go further down this path...again.

[Smallc]

Why is that bad?

It isn't A ) bad, B ) necessarily true, or C ) relevant. The statement simply exposes him for an anti government, far right wing, ideologue.

Edited November 5, 2010 by Smallc

[Evening Star]

Are you serious? Why are crown corporations throughout Canada during history being privatized?

Mostly in the last 25 years, though, right? For decades before, both PC and Liberal governments seemed happy to develop and expand Crown Corporations and they were effective and successful in a number of cases.

[Evening Star]

It isn't A ) bad, B ) true, or C ) relevant. The statement simply exposes him for an anti government, far right wing, ideologues.

Ha, I wondered if it was just a statement of libertarian 'principle' or if there was some economic reason behind it.

[Smallc]

Mostly in the last 25 years, though, right? For decades before, both PC and Liberal governments seemed happy to develop and expand Crown Corporations and they were effective and successful in a number of cases.

That's right. Sometimes government does things well, and sometimes it doesn't. Sometimes privatization is the answer, and sometimes it isn't. There is no simple ideological answer.

[blueblood]

I didn't argue that Crown corporations where the best way to do things. I'm not convinced that privatization is always the best answer. If it means that Manitobans have to pay higher taxes elsewhere (and there's more proving that than the opposite), then I'm not in favour. Unlike you, I'm not driven by a strict ideology on these matters.

Do Saskatchewan citizens pay higher taxes now than when Potashcorp went private? It would be political suicide for any government to hike taxes when a private company is lining their pockets more than the crown corporation they just privatized.

Why would Manitobans pay higher taxes if a private company is going to be giving the gov't more money than the crown corporation? The only thing going up is hydro rates, but that can be cut by our friends stock ownership and dividend payments.

Really, explain why you thing that.

You think crown corporations are the best at raising money, management, and results.

I'm not sure you know what you're talking about. Reservers have to be compensated for business on their land.

And management on the reserve is not going to be stupid enough to charge more than the cost of a small detour around the reserve (Not the massive detour across farmland that costs an extra approx billion dollars).

Reserves these days are now getting on board the private investment train. They are now realizing that using the government as an industry is unsustainable.

They take a great deal of it...and there is far more profit to go around in that case.

Not enough to affect the company's bottom line and to justify a detour.

In most cases, I don't disagree.

I'm not sure of your point here. My only point is that privatization is not always the answer, and that Manitoba Hydro seems to have little problem obtaining capital.

Hooray debt with interest payments and raiding other provinces piggy banks for everybody!

Why is that always the best solution? Have you looked at the per capita GDP numbers of Manitoba vs BC? They aren't that different.

Who am I going to listen too, scores of CEO's worth millions of dollars and BNN commentators or a young naive wage earner?

You are arguing about two cases that aren't even closely related. You have no proof for any of your assertion, and you are simply sticking to your ideology....and so I see no reason to go further down this path...again.

If Brad Wall and Grant Devine are going to go on BNN and make the arguement why the privatized potashcorp and how much of a benefit it has been for the province, I'll give them the benefit of the doubt. That's not ideology, that's fact. If Crown Corporations were such good money makers as you made them out to be, why would a government want to cook its golden goose and hike up taxes to make up for the lost revenue. Could it be perhaps that private companies are far more efficient at resource extraction, raising funds, management, making money than crown corporations?

I'm not quite sure you are familiar with the term opportunity cost. The inefficiencies, and slowness crown corporations take in raising capital and management compared to publically traded companies ends up costing tax payers in the end. This is why the oil sands are in publically traded company's hands and not in crown corp's hands.

[wyly]

If Brad Wall and Grant Devine are going to go on BNN and make the arguement why the privatized potashcorp and how much of a benefit it has been for the province, I'll give them the benefit of the doubt. That's not ideology, that's fact. If Crown Corporations were such good money makers as you made them out to be, why would a government want to cook its golden goose and hike up taxes to make up for the lost revenue. Could it be perhaps that private companies are far more efficient at resource extraction, raising funds, management, making money than crown corporations?

Brad wall had nothing to do with privatizing Potashcorp that was all Devine and Devine was a financial idiot the province was deep in debt when his government was kicked from office which proves contrary to popular belief conservatives are the worst money managers...Devine couldn't win an election as town dogcatcher if he were to run for office in sask, the conservative legacy was so bad that they had to chnage the name of the party...

potash gained profit more because the rise of value in hard commodities than privatization...

Edited November 7, 2010 by wyly