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Will local Canadian bid for POT challenge BHP?

|Includes: BHP Billiton Limited (BHP), MOS, NTR, NTR

Local investors from Saskatchewan's "first nations" community have raised nearly $25 billion to bid for the crown jewel of the province, fertilizer producer PotashCorp. Reportedly, the consortium doing business under the name of the Indigenous Potash Group raised the funds from a combination of Canadian pension fund managers and foreign interests. Their goal is to keep the company in Saskatchewan and independent, while pumping extra money into its capital structure. The bid would come as a direct challenge BHP Billiton's BHP $39 billion offer for POT.

The Canadian federal government is gearing up to make its final ruling on the BHP offer today. Since it only provides $130 in cash per share of POT -- and those shares are now trading well above $140 apiece -- it is unlikely that the bid will go through in its original form. Meanwhile, the indigenous investors reportedly have the backing of Saskatchewan officials and members of POT management. While there has been plenty of speculation and intrigue surrounding other mining companies and Chinese chemical interests in particular stepping up for POT, none have yet been made formal.

We will probably see other bids emerge today. Meanwhile, watch IPI, MOS and AGU for a sense of how heavy demand for smaller potash players becomes today. 

Disclosure: no position