BHP's Potash Bid May Be In Trouble

BHP Billiton's BHP $38.6 billion hostile takeover attempt of Potash Corp. of Saskatchewan POT, the world's largest fertilizer producer, may be facing a major as provincial authorities of Saskatchewan were reportedly set to scuttle the bid. Since the bid was announced over two months ago, analysts have speculated that Canada's government would be reluctant to allow Potash to fall into foreign hands, perhaps one reason why a Chinese suitor was never able to mount a serious offer for Potash. Before the provincial government would consider supporting the deal BHP would have to offer compensation for the 3 billion Canadian dollars ($2.9 billion) in revenue Saskatchewan believes would be lost over the next 10 years as a result of a takeover, the Wall Street Journal reported, citing a local official. BHP, the world's largest mining company, has said it will make commitments to address that issue. Even if the provincial government of Saskatchewan opposes the bid, it does not mean the offer is dead. The province provides a recommendation to federal Canadian investment regulators who have final say over a transaction and the the deadline for that decision is November 3, the Journal reported. While one of the more acquisitive mining companies in the world, BHP has had to digest failed mega-deal attempts over the past few years and had to kill a $116 billion iron joint venture with rival Rio Tinto RTP earlier this week.