BHP chief says Potash deal must benefit shareholders
BHP Billiton chairman Jac Nasser told shareholders Thursday that the mining giant would pull out of a hostile 40-billion-dollar bid for Canada's Potash Corp if it proves too expensive.
"Any acquisition or investment must create value for our shareholders. If shareholder value is not demonstrated, we will not proceed with the proposed acquisition," Nasser told BHP's annual general meeting in London.
He was speaking after the Wall Street Journal reported this week that the Saskatchewan government would reject the bid for the fertiliser company unless BHP offered three billion Canadian dollars (2.9 billion US) in compensation for lost revenue.
Anglo-Australian firm BHP has promised to make "significant commitments" to ensure that the Canadian region gained from the deal, but Nasser said Thursday that there was a limit to how much it would offer.
"The operations of PCS (Potash Corporation of Saskatchewan) are tier one, low cost, expandable, and would further diversify our portfolio by commodity, geography and customer," Nasser said.
"Having said that, for us the guiding principles of any investment or acquisition are the creation of shareholder value and the maintenance of our solid A credit rating."
Elsewhere in the AGM, the BHP chief said the global demand for raw materials was soaring, but "it is still possible that the recovery could stall".
© 2010 AFP