Potash Corp.'s mine in Rocanville, Sask.
Potash Corp. of Saskatchewan Inc. says it has been in discussions with 15 potential bidders for the company as it works to trump BHP Billiton Ltd. 's $38.6-billion (U.S.) hostile bid, but needs more time for a possible counteroffer to come forward given the size, complexity and funding required to do the transaction, new regulatory documents filed Friday show.
The "highly charged political environment" around approving such a bid is also a factor weighing on timing of talks, Potash Corp. says.
In a submission before the Saskatchewan Financial Services Commission, Potash Corp. said the global economic climate is another issue given "the reality that financing is less readily available than it has been in the past."
The Saskatoon-based miner's submission comes ahead of a Nov. 8 hearing where the provincial regulatory body will hear BHP's challenge to Potash Corp.'s shareholder rights plan. The so-called "poison pill" was adopted to allow Potash Corp. more time to explore and develop alternatives offers.
BHP has argued the rights plan should be rejected because there is "no reasonable likelihood" that other bidders will emerge.
Potash Corp. said it has "engaged in discussions with 15 strategic, financial and state-sponsored potential bidders or investors," but they need more time to evaluate the company and "whether and at what price they may be interested in pursuing an alternative transaction."
The challenge for possible rivals is not just finding enough funding to trump BHP's bid, but getting approval from Investment Canada. As The Globe and Mail reported Thursday, there's mounting skepticism in Ottawa over BHP's offer days ahead of Investment Canada's decision expected by Nov. 3.
Potash Corp. recognizes those government hurdles, saying "in some cases, potential bidders and investors … require positive preliminary signals from the Canadian government and regulators that they would be open to considering a bid or investment."
Sources close to Sinochem Group have said the Chinese state-backed enterprise would require a signal from Ottawa that its bid would be fairly considered before making an offer.
Also cited as a challenge to the process was the recent "direct and forceful speech" by Saskatchewan Premier Brad Wall urging Ottawa to reject BHP's bid, which Potash Corp. said has "inevitably also impacted the progress of negotiations with other foreign entities."
It said other potential bidders are waiting for Investment Canada's decision on BHP. If approved, "it is likely that there would be rekindled interest," Potash Corp. said.