Pension Funds Looking at Potash Bid?
ABC News reports, Pension Fund Approached on Potash Bid:
The head of a major Canadian pension fund says a Chinese sovereign wealth fund is interested in making a joint-bid with a Canadian pension fund for fertilizer-maker Potash Corp. of Saskatchewan Inc.
Leo de Bever, chief executive of Alberta Investment Management Corp., which manages $70 billion Canadian (US$65 billion) in public sector pension funds, said Thursday his fund and other major pension funds in Canada have been approached by an intermediary looking to put together a rival bid to BHP Billiton’s $39 billion hostile offer.
De Bever said in an interview on Thursday that he’s not interested.
Australia’s BHP Billiton Ltd., the world’s biggest mining company, launched a hostile $130-a-share takeover on Aug. 18 after Potash directors rejected its offer.
It seems that AIMCo weren’t the only ones approached to make a rival bid. CBC reports that PotashCorp takeover bid to get review:
Saskatchewan Energy Minister Bill Boyd said Thursday the province has commissioned an independent review of any takeover of fertilizer maker PotashCorp.
The Conference Board of Canada will analyze the risks and opportunities a deal would present.
Australian miner BHP Billiton launched a hostile $38.6-billion US, or $130-a-share, bid on Aug. 17.
PotashCorp rejected the BHP bid as too low, but a sweetened offer or white-knight bidder has yet to emerge.
The announcement came the same day as a large Alberta-based pension fund said it had been approached by potential rival bidders to help with an offer.
Leo de Bever, CEO of AIMCo, said it has been approached by some government wealth funds and others to make an offer.
De Bever said in a later interview that AIMCo and other funds had been approached by brokers looking to connect Chinese partners with Canadian players, with an eye to taking some kind of run at PotashCorp.
But de Bever cautioned that talks so far had been “academic and preliminary” and that no actual negotiations had taken place.
Chinese, Australian and other companies are also said to be weighing such bids, but they would likely have to line up Canadian financing partners such as AIMCo, the Canada Pension Plan Investment Board or the Ontario Teachers Pension Plan to help facilitate a rival bid.
Generally in these situations, a foreign bidder may seek “local cover” from pension funds to make the bid more “palatable,” de Bever said.
AIMCo is one of Canada’s biggest investment funds and handles $71 billion in assets on behalf of the Alberta government and its workers.
De Bever said he has had trouble working out an economic justification for a higher bid than BHP’s.
“Getting into a bidding war with BHP is not the best way to deploy our capital,” he told a news conference in Calgary ahead of the release of the pension fund’s annual report.
Maximum benefits
Boyd said the independent review will ensure that the people of Saskatchewan get the maximum benefits from the development of the province’s potash industry
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Tags: investment management corp, potash corp of saskatchewan, potash corp of saskatchewan inc
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