Broken promises mark foreign mining deals in Canada
Rio Tinto, Xstrata and BHP Billiton have all reneged on undertakings given prior to a Canadian takeover (in Rio Tinto’s case with regard to Alcan and in BHP Billiton’s with regard to Rio’s Canadian uranium and copper mining subsidiary, Rio Algom).
BHP Billiton is now making promises in Canada again to win support for its bid for Potash Corporation of Saskatchewan, which has operations in, among other places, Moroccan-occupied Western Sahara. If BHP Billiton has already gone back on promises to Canada, what confidence can we place in anything it might say with regard not only to workers at Potash Corp, but also to the Saharawi people?
Canada governments may back BHP’s Potash bid
BHP Billiton Ltd’s hostile takeover of PotashCorp will likely be backed by the governments of Canada and Saskatchewan, despite a report saying the deal could reduce government revenues by at least $2 billion over the next 10 years.
BHP asks US courts to dismiss Potash Corp lawsuit
BHP Billiton requested a U.S. court to dismiss a lawsuit filed by Potash Corp, which alleges that BHP misrepresented material facts related to its $39 billion hostile bid for the world’s largest fertilizer maker. Last month, Potash Corp filed a lawsuit against BHP, which seeks a preliminary injunction to block BHP from moving ahead with its proposed bid. Saskatoon, Saskatchewan-based Potash Corp in August flatly rejected BHP’s $130 a share offer as “grossly inadequate.” BHP argues that the Potash Corp lawsuit fails to identify any misleading statement or material omission on the part of BHP.
Potash sale would yield huge payout for insiders
Insiders of Potash Corp. of Saskatchewan Inc. will earn one of the largest windfalls from any takeover in recent Canadian history if the company is sold, according to a detailed analysis by The Globe and Mail of company documents. Top executives and board members of the Saskatoon-based company would collectively reap more than $700-million (Canadian) in option profits, stock proceeds, severance and other payments at BHP Billiton PLC’s current offer price of $130 (U.S.) per share, or about $134 Canadian. If the company ultimately sells for roughly $150 (U.S.) – as many investors and analysts expect it will – the number would exceed $800-million (Canadian). Even the lower of those two figures far exceeds the amount that key insiders walked away with in such deals as Rio Tinto’s $38-billion acquisition of Alcan Inc. in 2007, or Vale SA’s $19-billion purchase of Inco Ltd. the year before.