Friday, September 10, 2010

BHP's (NYSE:BHP) Underwriters Attract Over $45 Billion for Potash (NYSE:POT) Bid

Loan underwriters for BHP Billiton Ltd. (NYSE:BHP) successfully wooed investors, as they exceeded the $45 billion the mining giant was looking for to raise in their bid for Potash Corp. (NYSE:POT).

Included in the underwriting group were Barclays Capital (NYSE:BCS), BNP Paribas SA, JPMorgan Chase & Co. (NYSE:JPM), Royal Bank of Scotland Group Plc (NYSE:RBS) and Banco Santander SA (NYSE:STD), who started marketing the deal on August 18, according to a source who didn't want to be identified.

According to the source, the loan will be signed within a ten day period.

BHP offered $130 a share in the bid for Potash, which the board rejected, calling it “grossly inadequate.”

China is looking for ways to block the sale to prevent BP from developing the type of pricing power some in the iron ore industry enjoy.

That's probably more fear than anything based in reality, as BHP has historically ramped up production and competed on volume and price rather than attempting to increase prices by controlling supply.

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