Potash To Move Some Staff To Canada To Fend Off BHP
Potash Corp. has pledged to move key staff from Chicago to Saskatchewan province as it tries to win political favor by matching BHP Billiton's promise to beef up its Canadian headquarters if it wins control of the fertilizer maker.
Saskatoon-based Potash Corp. outlined a series of commitments to the province in a bid to sway political opinion against BHP, which has also promised to move key jobs back to Canada if its $39 billion takeover bid is successful.
The views of the province's government will be influential in Canada's decision, due on Nov. 3, on whether to allow BHP's hostile bid for Potash Corp to go ahead.
Potash pledged to relocate executives responsible for legal, human resources and investor relations to Saskatchewan.
It also committed to maintain its headquarters in the Canadian province, saying senior officers including the chief executive would maintain residency in Saskatchewan.
A lawyer in Toronto said the commitments were a strategic move by Potash Corp to persuade Saskatchewan politicians that the company has its own plans to boost employment in the province.
"It is designed to deflect attention away from the benefits that BHP is offering," said Darryl Levitt at law firm Macleod Dixon.
"Any successful bid or defense will need to emphasize the social and economic impacts of the takeover or resisting a takeover, and employment is one of the key concerns," he said.
Potash also pledged that any bidder for the company which had its blessing must commit to purchasing products through the Canpotex marketing scheme to ensure support for potash prices.
"We believe it is critically important for both the provincial and federal governments to understand that the interests of PotashCorp shareholders and the citizens of Saskatchewan and Canada will be best served if alternatives are allowed to emerge," Potash chief executive Bill Doyle said in a letter to shareholders on Wednesday.
"Our board is working hard on this, and we have urged the Canadian government to remain open and to provide a level playing field as it reviews the impact of any potential transaction."
The company also outlined other economic incentives to win political support, including commitments to community spending and more than $7 billion in capital expansion projects.
Wild said in the letter that Potash was still evaluating several alternatives in an "active and ongoing" process.
BHP said Potash's move was in response to its own public commitments.
"Under BHP Billiton, the global potash team, including its President, would live, work, pay taxes and raise their families in Saskatchewan as well as maintaining a residence in the province," BHP said in a statement.
Potash, the world's top fertilizer maker, has flatly rejected BHP's $130 per share offer and is seeking a white knight to fend off the world's biggest miner.
Potash Corp shares rose nearly 1% on Wednesday to $148.47, holding well above the offer price with investors expecting a higher bid to emerge from another party or BHP.
However, analysts say Potash is looking increasingly desperate. Efforts by China's Sinochem to find partners have not yet materialized into a rival bid. Analysts last week said media reports of other potential rival bids involving Canadian and Singaporean funds looked unwieldy.
