Tuesday, October 19, 2010

BHP (NYSE:BHP) Asks Court to Reject Potash (NYSE:POT) Request for Confidential Documents

The nationalist-fueled obsession of Potash Corp. (NYSE:POT) in its attempt to fight off the bid by BHP Billiton Ltd. (NYSE:BHP) gets weirder and weirder, as their latest action has been to ask a court in Chicago to force BHP to hand over private documents on their strategy on how they're going to gain regulatory approval to take over the company.

With little to stand in their way, other than the above-mentioned and increasingly nationalistic reason, BHP doesn't have to do too much other than continue to tell their story and refute objections based mostly on emoting rather than actual facts.

Although the continuing fantasy that there are a number of alternate suitors for Potash secretly waiting in the wings, as things unfold, they are largely seen to be built on shifting sand rather than solid or actual options. In some cases it's doubtful if they were even true in the first place.

As far as the documents being sought, Potash is asking the court to allow them to see what BHP and government officials communicated about in relationship to the offer.

It's arrogant and presumptive to even ask for that in a way that appears to be using the court to do the work they aren't able to do.

Although it would be outrageous for the court to rule in the favor of Potash, you never know what could happen in these types of cases.

BHP said concerning the request, “If a target company could obtain regulatory submissions made by a bidder in connection with a pending tender offer, the bidder’s motivation to fully co-operate with the government would be fundamentally chilled. PCS should not be permitted to do an end-run around the important policies and laws of its home jurisdiction, and this court should afford comity to those policies and laws.”

BHP is right.

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