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Trevor Berg, Mill General Super Attendant, holds some potash chicklets in a storage building at the Potash Cory mine near Saskatoon, SK. on August 19th, 2010.Liam Richards

Potash Corp. of Saskatchewan Inc. lashed out at a review of BHP Billiton Ltd.'s hostile bid, urging government officials to consider an alternative offer that Potash Corp. insists is coming.



The Saskatoon-based company's reaction Tuesday came as BHP alleged Potash Corp. has been "manipulating" its stock price and "misleading the market" about the prospects for a competing offer and the future price of potash.



It's the latest clash in a battle between the two companies that has been escalating since BHP made its unsolicited $38.6-billion (U.S.) offer for Potash Corp. in late August.



Potash Corp. has rejected BHP's $130-per-share bid as too low and says it has been in talks with other potential bidders.



A possible Chinese bid, likely from chemical conglomerate Sinochem Group, is considered Potash Corp.'s best hope for a rival bid.



So far, no alternative offer has been put on the table.



Potash Corp. is urging Saskatchewan officials to "remain open to reviewing alternative bids," saying the Conference Board of Canada report's findings on the impact of a BHP takeover on the province are "understated."



Saskatchewan commissioned the board to review the economic impact of a takeover of Potash Corp., one of its largest taxpayers and a source of royalty income.



The report found the BHP bid could cost the province $2-billion (Canadian) in lost tax and royalty revenues over the next decade, and up to $5.7-billion if BHP ran both the Potash Corp. mines and its own Jansen development project at full capacity.



However, the conference board said the full-capacity scenario was unlikely because it would lead to dramatically lower potash prices and less profit for BHP.



The report also concludes a BHP bid would be of "minimal risk" to the province, warning that a potential rival offer from a Chinese state-owned company would be more concerning.



Saskatchewan said the report will help it decide whether to support BHP's bid before Ottawa, which has the final say.



Potash Corp. argues the review also ignores its position that the Canpotex cartel-style of marketing potash should remain intact.



The conference board said the Canpotex marketing arm's role was "becoming increasingly redundant" with few potash players in the world market.



That's in line with BHP's position that the model is becoming outdated and its vow to back out of the organization if its Potash Corp. bid is successful.



Conference board chief economist Glen Hodgson responded to Potash Corp.'s reaction Tuesday saying, "We stand by our report."



Potash Corp. is also fighting BHP in court, after filing a lawsuit last month alleging it misled and confused investors with its offer and plotted to drive down the share price to gain control of the company at a cheaper price. BHP denies the allegations.



The two sides have been battling over which documents should be handed over to support their sides of the argument, and on Tuesday BHP filed a motion for access to Potash Corp. documents related to alternative bidders.



"One key defence BHP Billiton will raise in respect of these erroneous assertions is that PCS's [Potash Corp.'s]share price has risen above the offer price, not because of any supposed 'confusion' caused by BHP Billiton or the inadequacy of its offer, but because PCS has been manipulating the price of its stock, including by misleading the market regarding the prospects for a competing bidder and the prospects for extraordinarily high potash prices that are twice as high as those of market commentators," BHP said in court documents filed Tuesday.



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