PotashCorp attacks BHP for calling its customers

Potash Corp. of Saskatchewan Inc. says suitor BHP Billiton is calling its customers “to sow seeds of doubt and confusion about the future” of the Canadian company.

Potash Corp. of Saskatchewan Inc. says suitor BHP Billiton is calling its customers “to sow seeds of doubt and confusion about the future” of the Canadian company.

Australia’s BHP Billiton Ltd., the world’s biggest mining company, launched a hostile US$130-a-share takeover on Aug. 18 after Potash directors rejected its offer. The Canadian company said it’s in talks with several other companies instead.

PotashCorp’s (TSX:POT) sales president, Stephen Dowdle, said in a letter to customers filed with regulators this week that they recently learned that Chris Ryder, director of Potash marketing for BHP Billiton, has begun calling Potash customers. Dowdle called it “inappropriate and highly unethical.”

Potash, the world’s largest fertilizer company, has rejected BHP’s hostile US$38.5-billion takeover offer as wholly inadequate.

Dowdle said they can only assume that BHP’s “purpose is to sow seeds of doubt and confusion about the future of PotashCorp by raising questions about our ability to do business across the nutrient spectrum as well as the future and makeup of our sales organization.”

“While we are disappointed that BHP Billiton would attempt to undermine our efforts to serve you, you should know that we remain 100 per cent committed to being your partner and your go-to source for your fertilizer needs,” Dowdle said in the letter dated Aug. 30.

Ruban Yogarajah, a spokesman for BHP Billiton, declined to comment on Potash’s letter on Tuesday.

Potash has said its share price had been depressed by the global recession. But it believes it is worth more because its shares should rise as growth in agriculture boosts demand for potash, a key ingredient of fertilizer.

Meanwhile, Lei Wang of Thornburg International Value Fund, a PotashCorp investor, said if BHP Billiton succeeds in taking over PotashCorp, some of the Canadian company’s investments in other fertilizer firms may be up for grabs.

“BHP is never content to be a minority stakeholder in others’ businesses,” Wang said.

PotashCorp has a 22 per cent stake in Sinofert Holdings Ltd., a Chinese fertilizer distributor. Sinofert’s state-owned parent, Sinochem, has been rumoured to be weighing a possible counter-offer to BHP’s.

PotashCorp also has a 14 per cent stake in Israel Chemicals Ltd., the world’s sixth-largest producer of potash, and a 28 per cent stake in Jordan-based Arab Potash Co.

Yogarajah said in an email that at this stage BHP Billiton has no plans to sell any PotashCorp assets.

Shares of Potash were up 90 cents to C$156.75 in afternoon trading on the Toronto Stock Exchange. BHP shares (NYSE:BHP) were down 24 cents to US$66.26 on the New York Stock Exchange.

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