The Saskatchewan government has enlisted a major research agency to run an “independent analysis” of a multinational mining firm’s proposed takeover bid for PotashCorp.
It’s been over 20 years since PotashCorp was a provincial Crown corporation, but “no matter who owns the potash mines, the people of Saskatchewan own the potash,” provincial Resources Minister Bill Boyd said in a release Thursday.
“It is our job as government to protect the best interests of Saskatchewan people and to be sure the province and Saskatchewan residents receive the maximum benefit from this valuable resource,” said Boyd, the MLA for Kindersley and a pedigreed seed grower.
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The Conference Board of Canada has been commissioned to provide a report by Sept. 30 laying out “the risks and opportunities this development presents.”
The development in question is the US$43 billion hostile bid for PotashCorp in mid-August by Australian mining giant BHP Billiton.
Saskatoon-based PotashCorp, the world’s biggest potash producer and one of the largest fertilizer firms, has publicly urged its shareholders to reject Billiton’s US$130-per-share offer for their holdings.
The Conference Board’s report, which the province also said it would make public by the end of this month, is also expected to include an assessment of “what governments can do to lower risk and increase opportunities,” the government said Thursday.
The report is then to be used as the basis for Saskatchewan’s submissions to Industry Canada, the agency responsible for analyzing these sorts of mergers and acquisitions under the Investment Canada Act.
The Investment Canada review process of such a takeover would lay out any requirements the federal government may demand of Billiton if a deal were to go ahead.
“Quasi-foreign interests”
The Conference Board, based in Ottawa with offices in Calgary and Toronto, is expected to research the “risks and opportunities” as they relate to “all aspects of potash industry employment” in the province and the royalty revenues, corporate tax revenues and “indirect” revenues accruing to the province.
The Board is also tasked with describing the “options available” to the province to reduce the risks in such a deal and to “act on strategic, economic and revenue opportunities manifest in the takeover bid.”
And those include its options relating to “any future evolutions of the bid, including the potentiality of sovereign or quasi-foreign government interests,” the province said.
For example, the Reuters news service reported Friday that China has directed its state-owned companies to meet with investment bankers and consider ways to mount a rival bid against Billiton’s. Alberta’s public-sector pension fund firm AIMCo told Canadian media Thursday it had been approached to help in such a bid, but declined.
The Board’s report, the province said, is also to look at how such a takeover would affect Saskatchewan’s “strategic position” in the international potash industry, as well as the province’s “reputation for a positive investment climate.”
PotashCorp was set up by the provincial government in 1975, buying up substantial interests in the province’s potash industry by the time Grant Devine’s Tory government privatized it in 1989.
Boyd, the Tories’ leader from 1994 until the currently-governing Saskatchewan Party’s formation in 1997, was not a sitting MLA with the Tories until their defeat by the NDP in 1991.
