Thursday, September 2, 2010

"More intrigue in the wonderful world of potash" (POT; MOS; IPI)

From FT Alphaville:
An even bigger week than usual for potash-related deals and developments with Russia — undoubtedly spurred to new competitive heights by BHP’s hostile $38.6bn bid for Canada’s PotashCorp — signalling its support for the planned merger between potash producers Uralkali and Silvinit.
On top of that come reports on Thursday that China Mining United Fund, which owns minority stakes in various potash producers including Canada’s Allana Potash Corp, is eyeing Allana’s Ethiopian potash project and could raise its stake in the company.
But the bigger intrigue comes in the BHP/PotashCorp bid saga. As DealJournal reports, Chinese agricultural conglomerate Sinochem has hired HSBC to advise it on options regarding BHP’s bid for PotashCorp.
The report quoted a person close to the situation saying Sinochem’s move is preliminary and “doesn’t mean the Chinese company has decided to make a counterbid for Potash”. The state-owned group is merely making preparations “just in case it gets the [official] nod” to launch an offer, the person added.
But, notes DealJournal, “an arm of the Chinese government, Sinochem would be a convenient vehicle for Beijing to protect its food security”. The report continues:
Since Potash rejected BHP’s unsolicited $38.6 billion takeover bid last month, bankers have been scouring China looking for potential clients who might consider making a rival bid. No such offers have materialized, although at least two other Chinese companies have weighed the possibility of a bid as part of a single international consortium led by one of the companies, Chinese private-equity fund Hopu Investment Management Co. The Hopu group also includes investors from Canada, the US and Asia. The status of that effort wasn’t clear.
Sinochem, as we noted recently, has strong ties to PotashCorp, which owns 22 per cent of Sinochem’s fertiliser unit, Sinofert; and it is worried about BHP’s bid....MORE