* Potential returns outweighed risk of deals failing
* Not giving up on chasing big deals after Potash failure
* Leaves door open to step up capital return to investors
* Sees rise of nationalism in tough economic times
* BHP shares up 0.5 pct in flat market
(Adds chairman, CEO comments, details)
By Sonali Paul and Rebekah Kebede
PERTH, Australia, Nov 16 Global miner BHP
Billiton (BHP.AX) is still interested in big acquisitions and
does not regret spending $875 million pursuing three major
deals that collapsed in the past two years, its chairman said
"For me, the juice is worth the squeeze on every one of
those," Jac Nasser told reporters after BHP's annual
shareholders meeting in the Australian city of Perth. "No pain,
Nasser was speaking a day after BHP withdrew a $39 billion
bid for top fertiliser maker Potash Corp (POT.TO) after Canada
blocked the offer.
BHP scrapped an iron ore joint venture with rival Rio Tinto
(RIO.AX)(RIO.L) a month ago after running into competition
concerns in Europe, Australia and Asia. It also abandoned a
full takeover of Rio Tinto in 2008.
Nasser dismissed speculation BHP would turn to smaller
deals because it is too big to win regulatory approval for
major takeovers, and said top quality acquisitions were still
available although he declined to name any.
"Don't look to us to be chasing smaller acquisitions of
lower quality," he said.
For other BHP-Potash stories [ID:nSGE6AE01K]
Special report on BHP's bid for Potash [ID:nN05288503]
Newsmaker on BHP CEO Kloppers [ID:nSGE6A309J]
Factbox on BHP's concessions to Canada [ID:nSGE6AE01V]
Q+A on BHP's potash ambitions [ID:nSGE6A4065]
BHP/Potash timeline: link.reuters.com/zew32q
Far from being thrown to the lions, the BHP board got off
lightly at the packed shareholder meeting. Chief Executive
Marius Kloppers, at the helm during all three failed
acquisitions, barely had to answer any questions as Nasser
fended them all off.
Shareholders have continued to back Kloppers, 48.
In three-and-a-half hours of questions, the directors faced
little heat about wasting shareholder funds and fielded only
two or three polite queries about returning cash to
shareholders and further acquisitions from the crowd of mostly
The rest of the grilling came from the usual cast of
characters at a BHP annual meeting, featuring environmental and
indigenous rights activists concerned about uranium mining and
project development footprints.
BUYBACK OPTION OPEN
The miner said on Monday it would return $4.2 billion to
shareholders through a share buyback, but shareholders hoping
BHP would return more of its $12.5 billion cash pile to
investors got no promises.
Nasser left open the possibility the board would consider
increasing the buyback in February when it reviews the group's
half-year results, but said the company was still focused on
investing in projects and acquisitions first.
It expects to spend $15 billion a year on development
"We always look to invest in our business, that's our top
priority," Nasser told shareholders.
The Potash Corp bid marked the third failed deal under
Kloppers, but his speech to shareholders expressed little
He said BHP was unable to satisfy Ottawa with enough beyond
$1 billion-plus in commitments the company gave to win approval
for the deal.
He said shareholders should measure the success of a deal
on whether it would create value or not.
"Winning is an easy game if you loosen the constraint of
actually having to create value for your shareholders," a
relaxed Kloppers told reporters after the meeting.
One of Ottawa's main concerns was that BHP may delay
development of its massive Jansen potash project in
Saskatchewan province if it succeeded in taking over Potash
Kloppers said the company remained committed to the project
and would be in a position to make a final decision on whether
to go ahead with the project in late 2011.
The key lesson from the abandoned deals was that regulators
are scrutinising deals more closely, Nasser and Kloppers said.
"The world is changing, whether you want to call it
protectionism or nationalism, but there is certainly a trend
towards a more difficult process when you are looking at larger
cross-border transactions," Nasser said.
Retail shareholders backed Kloppers' acquisition ambitions,
but said they were starting to worry about the money that has
gone down the drain.
"I'm very happy with Kloppers. But I'm a bit disappointed
with the amount of money being spent on failed acquisitions,"
John Black, a long-time BHP shareholder said before going into
BHP shares rose 0.5 percent to A$44.35 in a flat broader
(Reporting by Sonali Paul and Rebekah Kebede; Editing by
Balazs Koranyi and Dean Yates)