A train car waits in line at Potash Corp.'s Cory mine near Saskatoon.DAVID STOBBE/Reuters
Potash Corp. of Saskatchewan Inc. has accused suitor BHP Billiton Ltd. of attempting to "sow seeds of doubt and confusion" among the company's customers.
In a letter sent to its customers, dated Monday, Potash Corp.'s president of fertilizer sales, Stephen Dowdle, sought to reassure buyers of the company's products. The letter, filed Tuesday with the U.S. Securities and Exchange Commission, said the company recently heard that BHP director of potash marketing Chris Ryder "has begun to cold call many of you."
Mr. Dowdle said BHP was trying to "undermine" Potash Corp.'s relationship with its customers.
"We consider this contact to be inappropriate and highly unethical," Mr. Dowdle wrote in the Potash Corp. letter. "We can only assume BHP Billiton's purpose is to sow seeds of doubt and confusion about the future of PotashCorp by raising questions about our ability to do business across the nutrient spectrum as well as the future location and makeup of our sales organization."
BHP is the world's largest mining company, and in mid-August launched a hostile $38.6-billion (U.S.) bid for Saskatoon-based Potash Corp., the world's largest miner of potash, a key ingredient in fertilizers.
BHP said it had no comment on the accusation.
Mr. Dowdle's letter was filed with the SEC because its content mentions the takeover, according to Bill Johnson, a Potash Corp. spokesman. The letter emphasizes the company's focus on delivering quality service to customers, even as it is embroiled in a takeover fight. "We are always here for you," the letter concludes.
"We felt it was important to reach out to our customers," Mr. Johnson said Tuesday.
Melbourne-based BHP, which has offered $130 a share for Potash Corp., does not sell potash but has a large project in early-stage development in Saskatchewan. It was because of this that Potash Corp. became suspicious. "The purpose of BHP Billiton's call clearly was not to solicit your potash order from BHP Billiton's Jansen project," the letter said.
Hugh Loomans, president of agriculture supplier Sylvite Group of Companies in Burlington, Ont., said he hadn't heard from BHP but did receive the Potash Corp. letter.
"I was surprised to hear about BHP," Mr. Loomans said. "If they've been calling people, it seems odd. At this stage of the game, I don't understand it."
Potash sellers are rebuilding interest among customers after demand for the product evaporated during the recession in 2009. In the second quarter this year, Potash Corp. potash sales were 1.9 million tonnes, almost quintuple sales of 400,000 tonnes in the second quarter of 2009.
David Ebner