BHP plays down suggestion of higher bid for Potash

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Mining giant BHP Billiton has played down the prospect of making a higher offer for Canadian fertiliser maker Potash Corp, saying its 40 billion US dollar takeover bid was the only one on the table.

Chief financial officer Alex Vanselow said the Anglo-Australian miner would be "in the potash business with Potash Corp or without".

"There is only one offer on the table, so why would we compete against ourselves," Vanselow told national broadcaster ABC on Sunday.

BHP last week launched a mammoth hostile all-cash takeover bid for Potash Corp but it was formally rejected as "wholly inadequate" by the Canadian company, which said it was exploring other offers.

Australian analyst Ben Potter said Monday that it was likely that BHP could pay more for Potash before it became "a bad deal".

"If it is such an attractive asset, there would be other people looking at it," Potter, from IG Markets, told AFP.

"They (BHP) are in a good position should there be another deal on the table."

Vanselow said it was "an opportune time" to make a bid for Potash because BHP's rivals were not in a position to raise the necessary credit.

"The opportunity in Potash is that we are now in a situation that our balance sheet allows us to raise the credit necessary to buy, the valuations match, and basically if you look at the landscape of competitors, they're not in the same position as we are," he said.

BHP said its credit rating would remain at desired levels after funding its 130 US dollars per share offer for Potash.

"We are not foreseen to go below investment grade, and that's a commitment that we've made in our strategy," Vanselow said.

"If you look at what the rating agencies have come out with, you see that we are in that level."

BHP last week said profits after tax soared to nearly 13 billion US dollars in 2009/2010, as commodity prices rebounded on renewed demand for raw materials from emerging markets, notably China, amid the global economic recovery.

© 2010 AFP

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