HONG KONG/NEW YORK Sept 22 (Reuters) - China’s Sinochem Corp has hired Deutsche Bank AG (DBKGn.DE) and Citigroup Inc (C.N) to advise on a possible move to foil BHP Billiton Plc’s (BHP.AX)(BLT.L) $39 billion bid to take over Potash Corp (POT.TO)(POT.N), sources with direct owledge of the matter said.
The Chinese state-owned chemicals group had not yet decided whether it would proceed with a formal bid and was exploring potential options, one of the sources said.
China typically buys about 7 percent of the output of Potash Corp, the world’s largest fertiliser maker. It fears a BHP takeover might push up the cost of the crop nutrient, 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 bid with a rival offer or by buying a blocking stake in Potash Corp. Market talk has centered on Sinochem.
Chinese officials have ordered state-owned companies to meet investment bankers to explore options. Sinochem has approached Singapore’s Temasek Holdings [TEM.UL] to join a consortium that may make a bid, sources have told Reuters. [ID:nSGE6860K3] [ID:nSGE682003]
The sources were not authorised to speak publicly about the matter and declined to be named. (Reporting by Joseph Chaney in Hong Kong and Michael Erman in New York; Editing by Chris Lewis)