Welcome to the Streetwise Morning Meeting, a round up of overnight happenings in the deal world.
BHP makes it official
BHP Billiton isn't waiting around for talks with Potash Corp. of Saskatchewan, instead going directly to shareholders with its $130-a-share offer. The hostile bid is attractive for BHP, which can borrow the money on good terms and get a fast return. Maybe that's why shareholders of Potash are fully aware that BHP can go higher.
There's also the prospect of a counterbid with backing from China, something that people close to the situation are watching very closely. The Globe and Mail's main story on the bid outlines how that could work.
BHP has a remarkable degree of support in Saskatchewan, and Potash Corp. may have less than it's banking on thanks to a perception that the company has already become a foreign player, reports the Globe and Mail's Gordon Pitts.
BHP is getting its financial help from JPMorgan Securities Inc., TD Securities Inc., Banco Santander SA, Barclays Capital, BNP Paribas and the Royal Bank of Scotland Group PLC. Potash Corp. has RBC Dominion Securities, Goldman Sachs and Bank of America/Merrill Lynch playing defence.
The Potash Corp. bid is a long-term play on food demand and grain prices. The more farmers can make, the more they are likely to spend on fertilizer. And farmers are making more again as wheat prices rebound, Bloomberg News reports.
Ontario Teachers may get Chinese partner in InterGen
China's largest power producer is looking at paying $1.2-billion (U.S.) for a 50-per-cent stake in InterGen, a Massachusetts-based utility. The owner of the other 50 per cent is Ontario Teachers' Pension Plan, which along with then-partner AIG paid $2.1-billion (Canadian) for the company in 2005. Bloomberg News is following that story.