BHP Billiton head office in Melbourne.MICK TSIKAS
BHP is accusing takeover target Potash Corp. of trying to block its bid in the regulatory stages and attempting to uncover confidential information that will help it make a counteroffer, according to court documents filed Monday.
The Australian mining giant is asking a Chicago court to reject a request by Saskatoon-based Potash Corp. to hand over its communications with government regulators and officials as part of its efforts to buy one of Canada's last major mining companies.
While Potash Corp. argues the documents are relevant to prove allegations BHP is misleading investors in its bid, BHP says it's an attempt to kill the deal.
"There is a very real possibility that PCS will use the information contained in BHP Billiton's ongoing regulatory communications 'to scrutinize and sabotage' the tender offer," state the documents filed by BHP's lawyers in a U.S. District in Illinois.
"It could use this information to help with its defensive measures, including to shape its own positions with regulators in an effort to convince them to block this transaction or to guide other potential bidders in their regulatory communications."
It's the latest in the running legal battle between the two companies, which has become a sideshow in BHP's $38.6-billion (U.S.) bid for the world's largest fertilizer company. Potash Corp. has rejected the $130-a-share offer as too low, and says it's working on alternative transactions to trump BHP's offer, which expires Nov. 18.
Potash Corp. launched a lawsuit last month against BHP, alleging it misled and confused investors with its offer and plotted to drive down the share price to gain control of the company at a cheaper price. BHP denies the allegations.
As part of the legal complaint, Potash Corp. has requested BHP hand over documents about its decision to enter the potash industry with its Jansen development project, as well as its unsolicited bid for the company.
In particular, Potash Corp. is seeking information on communications with government officials relating to the offer.
Investment Canada is set to rule on the "net benefit" of the BHP offer by Nov. 3, and the Saskatchewan government is expected to announce as early as this week whether it will back the bid before Ottawa.
BHP alleges Potash Corp. has already attempted to prevent it from receiving regulatory approval by "matching several of its proposed undertakings."
Last week, Potash Corp. made a "pledge to Saskatchewan" that it would relocate a handful of Chicago-area senior executive jobs to Saskatchewan, which BHP called at the time a copycat move of what it has promised to do in its offer.
Forcing BHP to hand over its confidential communications with regulators would also set a bad precedent for future foreign takeovers, the miner argued.
"If a target company could obtain regulatory submissions made by a bidder in connection with a pending tender offer, the bidder's motivation to fully co-operate with the government would be fundamentally chilled," the court documents state.
"PCS should not be permitted to do an end-run around the important policies and laws of its home jurisdiction, and this Court should afford comity to those policies and laws."
Potash Corp. declined on Monday to comment on the allegations made in the court documents.