* Potash owns 13.9 pct, seeks another 11.1 pct
* ICL shares up 5 pct in Tel Aviv
By Tova Cohen
TEL AVIV, Dec 19 Canadian fertiliser maker
Potash Corp is seeking permission from Israeli
authorities to raise its stake in rival Israel Chemicals
to 25 percent, a government source said.
"Potash Corp has requested approval from the government to
raise its stake to 25 percent," the source, who asked not to be
identified, told Reuters on Monday, confirming a report in the
Calcalist financial daily.
Potash, the world's largest fertiliser manufacturer,
holds 13.9 percent of ICL's shares valued on the market at 6.5
billion shekels ($1.7 billion). An 11.1 percent stake has a
market value of about 5.23 billion shekels.
Shares in ICL, the world's sixth-largest potash producer and
the second-largest company on the Tel Aviv Stock Exchange, were
up 5 percent to 37.65 shekels in afternoon trade.
A spokeswoman for ICL said the company does not comment on
matters relating to its shareholders.
Potash last acquired ICL stock in 2010 when it bought about
ICL is a strategic company which has exclusive rights to
some of Israel's most valuable natural resources, including Dead
Sea minerals. The government was given a golden share in ICL
when it was privatised and as a result government approval would
be required for Potash to raise its stake.
Barclays Capital analyst Joseph Wolf said Potash's request
is not surprising, noting it has a strategy to own good potash
assets and already holds 30 percent of Arab Potash Corp, which
mines the Dead Sea from the Jordanian side.
"We believe this news should be a positive catalyst for the
shares in the short term, as there has not been that much
stock-specific good news lately," said Wolf, who rates ICL
"In addition, it highlights that Potash sees value in
ICL beyond any change in royalty fee or Dead Sea salt harvest
cost," Wolf said.
ICL is in talks with the government over who should pay the
costs of a plan to harvest salt in the Dead Sea to prevent
flooding caused by ICL's mining activities. The government is
also considering increasing royalties ICL must pay to extract
minerals from the Dead Sea.
ICL is controlled by the Ofer family through holding company
Israel Corp, which owns 52.3 percent. Potash is the
company's second largest shareholder.
According to Calcalist, Potash is seeking to purchase public
shares, mainly those held by institutional investors in Israel
and abroad. The investors were contacted by a foreign bank which
did not disclose the purpose of the possible acquisition.
Wolf said he believes that longer term, the best source of
the stock would be for Israel Corp to reduce part of its stake
but still maintain control.
Estimates on the market are that although Potash is seeking
to acquire the stock now as a financial investment, it could aim
to gain control of ICL in the future, Calcalist said. If it
seeks control of ICL, it will need further approval from