The Canadian government is attempting to sway public opinion against the bid by BHP Billiton Ltd. (NYSE:BHP) for Potash Corporation of Saskatchewan (NYSE:POT), generating the question on whether or not the bid is good for the Canadian province.
The premier of Saskatchewan, Brad Wall, said, "The question needs to be, 'Are Saskatchewan people, are Canadians better off as a result of this, is our economy stronger as a result of this very large deal?'". We're doing our homework, we'll see what all of that due diligence tells us, but as of today I'm having a hard time answering that question in the affirmative."
This is all smoke and mirrors, as the real issue is the Canadian province extracts royalty fees from Potash, and the announcement by BHP they weren't interested in continuing on with the marketing arm Canpotex, is what's really behind the "better for Canada" issue.
Canpotex is the consortium of Potash, Mosaic (NYSE:MOS) and Agrium (NYSE:AGU), which in reality are a monopoly controlling potash prices in this part of the world.
They are afraid, and rightly so, that BHP will abandon the monopoly once the existing agreements run out, which would lower the price of the fertilizer and Saskatchewan wouldn't receive as much in fees as they had been.
This shouldn't be any of the business of the Canadian government, as they shouldn't have any say in non-legal matters of a company and how it is run or whether it is acquired or not.
Since when does a business equate to a quasi-government entity, where clueless politicians consider an asset of the country and not the shareholders or individuals which own it?
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