Canadian Minister of Industry Tony Clement said here Wednesday that he invoked Canada's investment laws to turn down a bid by BHP Billiton to take over Potash Corp., the world's largest potash producer.
"I have sent a notice to BHP Billiton, indicating that at this time I am not satisfied, for the proposed transaction is likely to be of net benefit to Canada," Clement said.
BHP Billiton, the Australian mining giant, has been given 30 days to revise its bid to increase its benefit to Canada, and the Canadian government will make the final decision at the end of that period, he said after the North American stock market closed.
Clement refused further comment on the issue but stressed Canada had a long-standing reputation for welcoming foreign investment. "The government of Canada remains committed to maintaining an open climate for investment," he said.
BHP Billiton began the hostile acquisition bid for Potash Corp. eleven weeks ago, offering 130 U.S. dollars a share. The bid was opposed by the government of Saskatchewan Province in Canada, which owned the company until 1991.
The deal is worth almost 40 billion U.S. dollars and would give BHP Billiton the dominant place in the world potash market.
Critics of the proposal said Potash Corp.'s head office should be forced to move back to Canada from Chicago, and legally binding agreements to prevent job cuts are also wanted.
Shares in Potash Corp. ended trading in Toronto Wednesday at 146.21 Canadian dollars (about 145.22 U.S. dollars), above BHP's offer price but below the 52-week high of 160 Canadian dollars.
