Monday, October 25, 2010

BHP (NYSE:BHP) Bid for Potash (NYSE:POT) Close to Being Decided

Excluding market factors, the bid by BHP Billiton (NYSE:BHP) bid for Potash Corp. (NYSE:POT) is coming to a head, as the Canadian government is pouring over the details to decide whether to allow the deal to go ahead.

The province of Saskatchewan, which has been in emotional hysterics since the bid by BHP, has continued on with their strange behavior in their opposition to the bid, pressuring the Canadian government to stop the deal from going forward.

The government responded by saying they'll perform their "own analysis" on the bid, which they have until November 3 to make a decision on.

Saskatchewan has shamelessly asserted the deal will cost the province billions if BHP wins the bid, even though outside studies have shown that not to be the case as time goes on, although it could, in the short term, result in lower tax revenue for the region.

"Obviously there is a process involved and the test that we employ under the Investment Canada Act is the net benefit to Canada test," said industry minister Clement.

It would be surprising to see a decision made against BHP, but stranger things have happened.

Other than Saskatchewan, there doesn't seem to be widespread opposition to the takeover, other than from other Canpotex participants Mosaic (NYSE:MOS) and Agrium (NYSE:AGU), who don't what to see their monopoly broken up if BHP wins the bid and decides to produce the fertilizer at the rate the choose and not controlled production to maintain prices, and thus, margins.

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