* Sinochem sees a bid for Potash Corp too large - China
* Sinochem would look at some Potash Corp assets -China
* China commerce ministry may start anti-trust
* Has received no bid applications from Chinese firms
* Potash not planning stake sale to block BHP - investors
By Zhou Xin and Michael Erman
BEIJING/NEW YORK, Sept 15 China's state-owned
Sinochem Corp appears unwilling to make a bid for Potash Corp
(POT.TO), even as Beijing voiced concern over BHP Billiton's
(BHP.AX) $39 billion bid for the Canadian firm on Wednesday.
Sinochem would instead consider buying some of Potash
Corp's assets such as its nitrogen or phosphates businesses as
an acquisition of the fertiliser giant would not be a good
deal, a senior Sinochem official was quoted telling an
influential Chinese magazine. [ID:nBJB003946]
China, which typically buys about 7 percent of the output
of Potash Corp, the world's largest fertiliser maker, fears a
BHP takeover might push up the cost of fertilisers crucial to
boosting food production for its huge population.
That has fed speculation that a major state-owned Chinese
company might try to stymie BHP's hostile takeover bid by
launching a rival offer or by buying a blocking stake in Potash
Corp, with market talk centring on Sinochem.
Han Gensheng, in charge of Sinochem's overseas deals, was
quoted by business magazine Caijing as saying even a bid of $10
billion would be too large for Sinochem, parent of China's
largest fertiliser distributor, Sinofert Holdings (0297.HK).
China voiced concern about the deal on Wednesday, with the
Ministry of Commerce saying it would closely watch BHP's bid
for Potash Corp and would investigate the deal if Beijing
received a formal application for approval. [ID:nTOE68E04C]
More on the BHP bid [ID:nN22340110]
Potash reserves/producers link.reuters.com/sum65n
StarMine comparative data: r.reuters.com/meh36n
Deal calculator graphic r.reuters.com/man27n
"Such a deal will definitely be a concern for the global
potash industry, including China's potash industry," ministry
spokesman Yao Jian told a regular news conference.
Yao said neither Sinochem nor any other Chinese firm had
notified the ministry of a possible counterbid for Potash Corp.
"We have not received any material or information from any
individual domestic company," he said.
Bankers have downplayed the prospect of a Chinese
counterbid, saying Canada would be concerned about a customer
taking over Potash Corp with the aim of keeping potash prices
Bankers also say any counterbid would have to exceed $45
billion, a massive price, to outgun BHP's balance sheet.
"That's a lot of money for any organisation," said a
resources banker not involved in the deal.
Caijing cited unnamed Sinochem sources as saying that
Sinochem had written to the State Council, the cabinet, seeking
support from the country's sovereign wealth fund CIC or China's
state lenders if Sinochem decided to bid for Potash Corp.
The cabinet did not reply directly and had required
Sinochem to work on a detailed feasibility report, the magazine
Chinese officials have ordered state-owned companies to
meet investment bankers to explore potential options to block
BHP's bid for Potash, and Sinochem has approached Singaporean
state investor Temasek Holdings [TEM.UL] to join a consortium
that may make a bid, sources have told Reuters. [ID:nSGE6860K3]
Potash Corp is confident it will get a better offer than
BHP's bid of $130 a share.
"We believe BHP will not be the only bidder in this
process, as we continue to seek to maximize value for all of
our shareholders," Chief Executive Bill Doyle said in a letter
to Potash Corp employees on Monday.
Potash shares last traded at $148.44, 14 percent above
BHP's offer. BHP's shares rose 1 percent to A$39.44.
Caijing reported that Sinochem was considering four
options. The first option was to file a bid for Potash Corp
directly to compete against BHP, but it noted that would be too
expensive and would run into Canadian regulatory hurdles.
The second option would be to work with other potential
partners, including Rio Tinto (RIO.AX)(RIO.L), Vale (VALE5.SA),
Teck Resources TCKb.TO and Cameco Corp (CCO.TO).
The third was to work with BHP and the fourth for Sinochem
to invest $10-13 billion to buy preferred shares or convertible
bonds issued by Potash Corp to become a strategic investor, the
The last option appeared to be unlikely, according to
Potash Corp investors who were briefed on Tuesday.
Potash Corp is not considering selling a large stake to a
third party or setting up long-term production sharing
agreements to block BHP's hostile bid, investors said.
That would mean that China or other rival bidders would
have to consider a full takeover of Potash Corp or look to
acquire a blocking stake from existing investors if they want
to scupper BHP's offer.
(Additional reporting and writing by Sonali Paul in Melbourne;
Editing by Mark Bendeich and Valerie Lee)