Not too hard to see this coming.*
Chinese chemical conglomerate Sinochem Group has formally asked the government to back a bid for Canada's Potash Corp (POT.TO) (POT.N), a local newspaper reported on Sunday.
The Economic Observer cited sources close to the deal as saying that, according to a preliminary assessment, Sinochem would need $40 billion to $60 billion to trump a $39 billion hostile offer by BHP Billiton (BHP.AX)(BLT.L) for Potash Corp.
The amount would be too much for Sinochem, which reported $25 billion in total assets at the end of 2009, the Beijing-based weekly newspaper cited analysts as saying.
In its application to the government, Sinochem argued that Beijing should back a bid for the Canadian firm because potash is key to China's national food security, the paper said.
The Economic Observer's story chimes with a report last Friday by the Globe and Mail in Toronto that Sinochem was trying to drum up support for a Chinese-led bid for Potash Corp.
Sinochem is the parent of China's largest fertilizer company, Sinofert (0297.HK)...MORE
Potash Corp. Considering Management-led Buyout/Trying to Form China led Group to Beat BHP Bid (POT; BHP)
"Sinochem Approaches Temasek on Potash Bid" and "Potash’s CEO Says BHP Unlikely to Be the Only Bidder" (POT)