Saskatchewan Premier Brad Wall has undertaken an aggressive campaign for a rejection of the BHP bid for Potash Corp.MARK BLINCH
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Bastion of the free market opposes deal
The Canadian government has only until midnight to make a decision on BHP Billiton Ltd.'s acquisition to buy Potash Corp. of Saskatchewan Inc. , and opposition to the deal is popping up in the unlikeliest spots -- chief of among them Calgary. It's Prime Minister Stephen Harper's back yard and supposedly the most free-market, free-wheeling city in Canada. Yet, there is significant backlash against the idea of Potash Corp. being sold.
Saskatchewan's premier now says he'll sue if the federal government approves the deal.
He may not be able to win, but a long legal campaign would be a threat politically to Stephen Harper's government. Saskatchewan voters are against the deal, and a long legal battle would enable the premier, Brad Wall, to potentially keep the issue on the front page in Saskatchewan, fuelling voter anger for longer than Mr. Harper can avoid an election. That would mean trouble for Mr. Harper in the 13 Saskatchewan districts his government now holds.
It could also introduce deal risk that BHP will not want.
Could a counterbid come from Russia? A producer there says the government is pushing the idea. And a Russian newspaper says that PhosAgro, a big firm with close government ties, could lead it.
If that's the case, the Russians need to move fast. Should BHP get approval, and win a challenge of Potash Corp.'s poison pill next week, it can fast track its bid to close.
Canaccord reports profit
Canaccord Financial Inc. reported second-quarter revenue that was up from a year earlier, but slower than in the immediately prior three months. Revenue was $149.3-million, a 21 per cent gain from the year-earlier quarter, a jump that came after Canaccord acquired Genuity Capital Markets. However, revenue was down 1.7 per cent from the first quarter as markets continued to bounce around. Canaccord managed to keep expense growth to a slower pace, helping to boost profit.
Profit rose to $9.7-million from $6.7-million the year before; however on an earnings-per-share basis it was unchanged as Canaccord issued a lot of shares in the Genuity deal.
"Though we are encouraged by the dramatic market turnaround the last two months, volatile market activity persisted through much of July and August and had a noticeable impact on business levels during our fiscal second quarter," said Paul Reynolds, President and CEO of Canaccord Financial Inc. "Client interest remains strong and as investors and corporate issuers regain confidence in the markets, the climate for trading and investment banking activity should continue to improve."
At the investment banking and trading division now known as Canaccord Genuity, revenue declined 3 per cent from the first quarter.