Here's a new name on the list of possible bidders for Potash Corp. of Saskatchewan Inc.: China's state Development and Investment Corp.
CIBC analysts Jacob Bout and Kevin Chiang, who cover Potash Corp., have just returned from China. In a report detailing their findings, they list a couple of names that haven't been on the widely mooted list of Chinese companies that could participate in a counterbid for Potash Corp.POT-N
SDIC has almost $26-billion (U.S.) of assets under management and according to its web site "is an important investor in China's high-concentration fertilizer sector, mainly engaging in potash and phosphate fertilizer projects."
The other new name on the list is Sino Agri-Industries Holdings Inc. Sino Agri-Industries is in the agricultural business and is a susidiary of China National Cereals, Oils and Foodstuffs Corp.
The CIBC analysts actually cut their price target from $165 to $150 on Potash shares because of concern that China won't be able to make a counterbid for the whole company, but instead will choose to try to structure any transaction as a blocking stake.
However, with a 50 per cent minimum acceptance condition only on its bid, BHP appears to have anticipated and potentially neutralized that scenario.
