MUMBAI/LONDON Reported fresh attempts to outdo BHP Billiton's $39 billion bid for Canadian group Potash Corp look unwieldy, analysts said, suggesting the world's biggest miner still has the field to itself.
Bernstein analyst Paul Galloway said getting the financial clout needed to improve on the terms of the biggest takeover bid this year required either aligning a diverse consortium or relying on the politically contentious backing of China.
The latest in weeks of speculation about ways BHP could be stymied saw reports that Canadian and Singaporean funds were talking about a possible deal, that China's preferred counterbidder was canvassing an Indian partner, and that Potash itself was examining a huge payout.
On the latter point, Galloway said Potash would find it challenging to demonstrate it can deliver more value by returning cash to shareholders.
Liberum Capital analysts said it was hard to see "a testosterone-filled bidding war" over Potash.
"With six weeks to go before the BHPB offer closes it is clear that the Chinese look unlikely to enter the fray and the schemes being tabled now are becoming increasingly political, complex and difficult to execute," they said in a note.
Still, Potash stock is more than 13 percent above BHP's $130 per share offer -- signaling investors anticipate a sweetened offer from BHP or a rival. BHP has set a November 18 bid deadline.
Potash has rejected BHP's bid as too cheap, and said it expected other investors to enter the fray.
Paul Cliff, head of European metals and mining research at Nomura, said the reports seemed to be "clutching at straws" and his base-case assumption remained a successful BHP takeover at a raised $150-$160.
British newspaper The Sunday Times reported Canada's Ontario Teachers Pension Plan (OTPP) was talking to Singapore investment fund Temasek about launching an offer for Potash, possibly with Canadian miner Teck Resources.
The Sunday Times and rival The Sunday Telegraph also both said Potash was considering defensive moves, including a break-up. Both said Potash could sell its nitrogen and phosphate operations and return up to $70 per share to investors.
The Telegraph said Potash was talking to OTPP and others, which had received strong support from the Canada.
Teachers and Teck were not available to comment on Sunday, but both have said previously they would not be interested in bidding. Potash and Temasek declined to comment.
"Everybody is talking to everyone," said a person familiar with the situation, who did not deny that Temasek had been approached.
Temasek was previously approached by Chinese group Sinochem . China is wary of BHP taking control over 25 percent of the world's supplies of potash, a commodity crucial for boosting food production to feed its huge population.
Temasek has made no decision on those talks, the person familiar with the situation said.
Indian newspaper The Economic Times reported Sinochem, hoping to overcome political hurdles, had approached Indian state-run miner NMDC to join a bid -- a claim denied by NMDC.
"There is no such proposal. In any case this is a very expensive property," NMDC chairman Rana Som Som told Reuters.
Sinochem will not bid for Potash unless Canada signals it would approve a deal led by the state-owned chemicals group, a person familiar with the matter said on Friday.
A spokesman for Sinochem declined to comment.
An Asia-based investment banker with direct knowledge of the matter said China wanted to avoid a public takeover battle and would prefer a negotiated deal.
China is nervous after previous backlashes in Canada and the United States forced the withdrawal of bids for Canadian miner Noranda and U.S. oil company Unocal.
"They recognize there are potentially significant challenges. The chances of this happening are pretty low," the investment banker said.
BHP Billiton's London-listed shares were down 0.1 percent to 2,159 pence by 1145 GMT.