No winner

16 September 2010 By Una Galani Follow @ugalani

Assembling a partly Chinesefinanced management buyout to trump BHP’s $38.6 bln offer will be tricky. China’s strategic interests conflict with those of financial buyers and a bid would face intense regulatory scrutiny. An MBO is a poor alternative to a real white knight.

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Canada's Potash Corporation of Saskatchewan is attempting to assemble a Chineseled consortium to back a management buyout to defend itself against BHP Billiton's $38.6 billion takeover, according to a report in the Globe and Mail.

The report, citing unnamed sources, said the bid would include significant capital from a Chinese company with contributions from sovereign wealth funds. It added that Canadian financial institutions, such as pension funds, and strategic partners such as rival NewYork listed potash producer Mosaic could also be part of the consortium.

These investors could provide half of the funds needed for an offer to beat BHP's $130 per share and the rest would be financed through debt and potential asset sales, according to the article.

On Sept. 13, Potash Corp sent a letter to employees reasserting that the fertiliser group has been approached by, and has initiated contact with, third parties expressing interesting in considering alternative deals.

Potash Corp's shares listed in New York closed at $147 per share on Sept. 15.

The company declined to comment.

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