* Potash sees compelling case to take over ICL
* Sees markets complementary, not overlapping
* Not concerned about China, India interest in rivals
By Rod Nickel
Nov 28 Potash Corp of Saskatchewan Inc,
the world's biggest potash producer by capacity, sees "lots of
hurdles" to its plans to take over Israel Chemicals Ltd
, an executive of the Canadian fertilizer company said
"We just think the possibility of that transaction and what
it can do for us in a soft market, and in a strong market, is
quite a compelling story," Chief Financial Officer Wayne
Brownlee said at a Citi investor conference in New York
monitored over the Internet. "The trick is, can we get there?
Lots of hurdles to deal with, and we're trying to do that
process right now."
Brownlee declined to identify the obstacles to any deal to
increase Potash's current 14 percent stake in ICL, the
sixth-largest producer of potash, an important crop nutrient.
He said it was difficult to say whether the hurdles were
mainly within Israel or with international authorities.
"The truth is, you're not going to get to the international
hurdle unless you get past the Israeli hurdle first," Brownlee
said. "You've got to get there and see if there's a transaction
that's a win-win for (ICL) shareholders and the countries that
we have exposure to."
He said the key markets for Potash Corp and ICL are mostly
complementary, not overlapping, which should bode well for
anti-trust rulings around the world.
"The question is, is there a price you'd be prepared to pay
that would be good and also be the lowest-cost supplier to any
customer in the world as a result of that? he said. "If you can
get that to work, how much effort do you want to put in to see
if you can move this through the various approval processes?
We're still trying to make that determination."
Israeli officials have said they plan to meet Potash Corp
officials this month before deciding whether to allow the
Saskatoon, Saskatchewan-based company to take over ICL.
Israel's government holds a so-called golden share in ICL,
so any deal would need approval from the Finance Ministry's
Government Companies Authority, the prime minister and the
Antitrust Authority, among others.
Any deal to give a foreign company control of ICL would be
politically sensitive in Israel, where a general election is
scheduled for January. A takeover by Potash Corp would rank as
the biggest-ever foreign takeover of an Israeli company.
About 34 percent of ICL, which has a market value of some
$15 billion, is traded on the Tel Aviv Stock Exchange.
Potash shares were up slightly in New York and Toronto in
early afternoon trading.
A lag in securing new supply contracts between North
American potash producers and the world's top two consuming
countries, China and India, has weighed down profits and forced
Potash Corp to idle mines.
Both of those key potash markets have recently been linked
to possible equity investments in Potash Corp rivals Uralkali
OAO of Russia and Belaruskali.
Such a development could potentially weaken the leverage
potash producers have in price negotiations with China and
India, but Brownlee said he is not concerned.
"I would be so surprised to see the owners of Uralkali or
the owners of Belaruskali - which is the government of Belarus -
to enter any transaction which changed the way they market
product. Why would I give up 15 percent ownership in a company
and destroy my business plan, and diminish the value of the
other 85 percent? I'm not too worried about that situation."
The main owners of Uralkali sold bonds exchangeable into
shares earlier this month in a deal that could give a Chinese
sovereign wealth fund a stake in the company. Belarus'
President, Alexander Lukashenko, said on Tuesday his country is
talking with companies from China, India, Europe and the Arab
world about selling a minority stake in Belaruskali.