China To The Rescue?? (POT, BHP)

A consortium of investors, led by Chinese private equity firm Hopu Investment Management Co. is looking at launching a rival bid for Potash Corp. POT, after BHP Billiton BHP announced a $130 cash offer for Potash. This comes from a report in the Wall Street Journal. Yesterday, Potash's board rejected BHP's bid, saying it materially undervalues the price of Potash. The investors, led by Hopu, include Canadian, American and Asian investors and at least two sovereign-wealth funds, the knowledgeable person said. This move comes as no surprise as potash is needed in emerging markets for farmers to expand their crop yields. With a population of over 1.3 billion, a deal being led by a Chinese private equity firm makes sense. While it is not known who is ultimately part of the bid besides Hopu, it is known that Sinochem Corp. isn't a member of the group. Potash has a relationship with government owned Sinochem through Sinochem's fertilizer arm, Sinofert. Potash has a 22% stake in Sinofert and has two directors on Sinochem's board. Ultimately, it looks as if Potash will receive another offer from another bidder, but as a long time share holder of BHP, I don't see BHP chasing Potash. If Potash goes to someone else, BHP CEO Marius Kloppers will look elsewhere to expand his potash presence. See Some of the Top Moving Indexes Here.