BHP Billiton (NYSE:BHP) said the rumors floating around that there are plan in place to sell off some of the assets of Potash aren't true, if they are successful with the bid for the fertilizer giant.
That is hard to believe though, as the cost to acquire Potash will probably have to be increased, and that would weigh on BHP, even though they claim they would have no need to sell off assets to shore up their balance sheet after the purchase.
A spokesman for BHP said, "Our financing is not dependent on asset sales and we do not require divestments to maintain balance sheet strength."
BHP CEO Marius Kloppers continues his mantra that the approximate $130-a-share offer is the only one made, and he is committed to remaining disciplined when it comes to the price to acquire Potash. No matter. If he wants it bad enough, we'll see the price increase even though he's attempting to downplay the possibility with a poker face.
While the company and Kloppers may not have any plans to divest of assets of Potash in place, there is sure to be some movement in that direction concerning non-core assets, even if the purpose isn't to strengthen the balance sheet. Some of them may not make sense for the company.
But there is a strong possibility the majority of the assets would remain under the BHP umbrella, as they are hungry for raw materials, and the world will continue to be once we move out of the recession, which is probably still several years away at best.
Long term this is a super deal for BHP if they can swing it, and adds to a strong, diversified portfolio of assets which will generate solid revenue and earnings for many years.
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