Report Favours BHP, Warns on China Bid for Potash
Saskatchewan's advisers urged the Canadian province not to oppose a takeover of Potash Corp (POT.TO) by BHP Billiton, and said a Chinese bid, if one emerges, could hurt their budget more, according to a Reuters report
Shares in Potash Corp, the world's largest fertilizer producer, strengthened after the release of the report (they closed up 2%), and Reuters says this suggests that investors believe the recommendations in a report commissioned by Saskatchewan will increase the likelihood that BHP's US$39 billion hostile takeover bid will succeed.
"If (Saskatchewan) wanted to act tough with BHP, it doesn't give much political cover," David McGrane, a political studies professor at University of Saskatchewan, is cited as saying of the report. "It definitely weakens their ability to be strict with their conditions" on a takeover.
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