Sunday, September 19, 2010

Potash powerplays

While the prospect of a financial rescue of a key industrial site from Chinese interests didn't turn out so good for this region, in Saskatchewan, it appears that the idea of Chinese financial backing may be the only prospect left to save that province's Potash corporation from the clutches of an Australian rival.

When we left on our travels of August the potash file had added a new player to the mix, as BHP Billiton an Australian conglomerate had made a surprising play to acquire its rival  Potash Corporation. Offering 130 dollars per share  in its bid to take over Potash Corporation, which would in the end mean that the Australian company would be investing over 38.6 billion dollars to take over the company.

In the weeks since that first offer came out there has been some high drama in the boardrooms of industry, moves that could very well have an impact on the future of any potential potash terminal on the north coast for the foreseeable future.

As previously noted in our archived items, BHP Billiton recently signed an agreement with the port of Vancouver, Washington to develop port facilities there to ship North American potash to world markets.

Should BHP Billiton be successful in it's hostile takeover bid for Potash Corporation, it's not beyond reason to expect them to make full use of their new port facility in the US, before any thought of expanding on the north coast may come up on their radar.

The current bid from the Australians, has had Potash corporation circling the wagons in a bid to cobble together a competing bid to rescue the company from the would be grasp of the Aussies. Company officials have been strongly urging share holders to turn down the Australians, expressing their concern that the share offer is far too low for what they believe the company is truly worth.

Their quest for financing  for the most part now seems to hinge on the decisions to be made in Beijing, which should it work out as they are hoping would deny BHP Billiton from any potential market domination in the world of potash production and distribution.

Considering the current dilemma facing Potash Corporation executives and looking beyond that ongoing drama, it seems likely that if the need for and the development of the much discussed Potash Terminal for Ridley  Island is to get back on track, it could very well be under the financial assistance of a Chinese government agency.

A development which would provide us all with a small bit of irony, considering the long winding road that we have been down on  the Watson Island file.

The financial manoeuvring and financial posturing has been playing out on with a number of stories and reports from the business pages and newscasts of the national media. Some of the latest developments can be found below.

September 20-- Globe and Mail-- Saskatchewan premier throws cold water on BHP bid for Potash Corp.
September 20-- Globe and Mail-- BHP talks up Saskatchewan
September 19 -- Globe and Mail-- Beijing nears decision on rival bid for Potash Corp.
September 18-- BHP finalizes loans to back Potash takeover
September 17-- Toronto Sun-- Chinese takeover of Potash to create conflicts: Analysts
September 16-- National Post-- Potash belongs to the people: Premier
September 15-- Globe and Mail-- China’s passion for potash
September 15-- National Post-- Let BHP buy Potash Corp.
September 15-- CBC-- China watching PotashCorp developments
September  15-- Globe and Mail - Potash brass, China in talks on rival bid 
September 14-- National Post-- Block the Potash bid 
September 7-- CBC-- PotashCorp could see other suitors: CEO 

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