BHP vows to avoid PotashCorp bidding war

BHP Billiton has told shareholders it will not be caught up in a bidding war for Canadian fertilizer giant Potash Corporation of Saskatchewan if the deal erodes shareholder value.

"The creation of shareholder value is clear and not negotiable," chairman Jacques Nasser told the Anglo-Australian miner's annual meeting in London, England.

BHP has bid $130 USa share, or $38.6 billion, for PotashCorp in what would be the biggest takeover in Canadian history.

However, the Saskatchewan company has sought a white-knight bidder and stock markets have expected a rival and richer offer that BHP would have to match or top.

No rival bid has yet emerged.

Nasser said BHP has been seeking to expand in the potash market since 2003 and sees its bid as a way to cash in on growing Chinese demand for the key mineral used in fertilizer as that country's farmers seek to boost crop yields in the coming years.

"The long-term industry fundamentals are exciting," Nasser told the meeting.

The annual meeting comes as pressure mounts on the Canadian government to kill the deal, which is opposed by the federal Liberal Opposition party and Saskatchewan's provincial government.

Later Thursday, Saskatchewan Premier Brad Wall will address the Regina and District Chamber of Commerce about his take on the offer for the Saskatoon-based fertilizer company.

It is expected that he will officially announce whether or not he's going to give the bid his blessing.

Wallmade it clear Wednesday that he won't, saying BHP hasn't convinced him the takeover will be of net benefit to Canada.

The net benefit test is a key determinant of whether a foreign takeover of a Canadian company gets approved by Ottawa.

Industry Minister Tony Clement is scheduled to release his decision on Nov. 3.

Clement has said he will take Saskatchewan's position into account when he makes his ruling.

Woos government

On Wednesday, Prime Minister Stephen Harper told the House of Commons that the hostile deal is not about the loss of a Canadian corporate champion.

Harper said the fight for PotashCorp is over "a proposal for an American-controlled company to be taken over by an Australian-controlled company."

BHP has been trying to woo both levels of government.

Andrew Mackenzie, BHP's chief of non-ferrous operations, said Wednesday he's willing to forego tax breaks to ensure Saskatchewan's coffers aren't hurt by the takeover.

The province estimates it would lose $3 billion Cdn over a decade if the deal is approved because BHP would be able to write off the capital expenditures on its existing Jansen potash project against profits made by PotashCorp's businesses.

Saskatchewan doesn't have the power to kill BHP's bid on its own, but its opposition could influence Ottawa's review.

PotashCorp has said the $130-per-share US bid significantly undervalues the company.