A tricky move

2 September 2010 By Una Galani Follow @ugalani

Intervening in the battle for control of the Canadian fertiliser group would fit with the stateowned firm’s aim to be a mainstay for China’s agricultural safety. Financing won’t be a barrier. But Sinochem will face other hurdles if it wants to block BHP Billiton’s $39 bln bid.

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China's staterun Sinochem has hired HSBC to advise it on its options for Potash Corp of Saskatchewan, which is subject to a hostile $39 billion takeover from BHP Billiton, the Wall Street Journal reported on Sept. 1.

The WSJ said the move by Sinochem was preliminary and doesn't mean that the diversified firm has decided to make a counterbid. On the same day, a Chinese newspaper reported that Beijing was also considering launching an antimonopoly investigation into BHP's proposed acquisition.

Separately, the energy minister of Saskatchewan said the province would have "lots of concerns" about a Chinese sovereign fund or stateowned company buying part or all of the company.

Sinochem has five business segments including agriculture, energy, chemicals, real estate and finance. The privately held group owns 53 percent of Sinofert Holdings, a fertiliser business listed in Hong Kong. Potash Corp owns 22 percent of Sinofert.

Potash Corp's shares closed on Sept. 1 at $145, above BHP's offer of $130 per share which Potash Corp's board has advised shareholders to reject.

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