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Remove 'poison pill,' BHP urges regulator

BHP Billiton Ltd. wants Saskatchewan financial regulators to remove a roadblock in its deal to buy Potash Corp. of Saskatchewan Inc. , saying the fertilizer giant has had enough time to find a competing offer.

The Australian miner is asking the Saskatchewan Financial Services Commission to remove a shareholder rights plan Potash Corp. put in place after rejecting BHP's $38.6-billion (U.S.) hostile offer as too low.

BHP's request comes on the eve of the federal government's decision on whether to approve the company's bid as being a "net benefit" to Canada, expected on Wednesday.

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If Ottawa rejects the bid, BHP's battle with Potash Corp. about the rights plan, also known as a "poison pill," will no longer be relevant. If Ottawa approves the bid, a hearing on the plan will go ahead as scheduled for Nov. 8 and 9 in Regina.

Potash Corp. argued in a submission to the regulator last week that it has talked to 15 potential bidders, but the interested parties need more time to evaluate the company and come up with the necessary financing.

In a follow-up submission on Tuesday, BHP argued that it received its $45-billion in bank financing for the acquisition in about two weeks, adding that "financing is readily available for qualified purchasers."

BHP also disputed Potash Corp.'s claim that more time is needed for other bids to come forward because of the size and location of its assets around the world.

"Larger and more complex companies have been targets of takeover bids," BHP said in its latest submission, adding that any potential bidders considering a deal would be "sophisticated entities" that would be "capable of making commercial decisions on a timely basis."

BHP cited takeover offers such as Rio Tinto's purchase of Alcan and Vale SA's purchase of Inco and the failed takeover of BCE by a consortium of financial investors as being "evaluated, negotiated and financed" in less than 90 days. "Potash Corp. is no more complex or difficult to evaluate than were the target companies in those transactions," BHP said.

BHP said that unless Potash Corp. can show evidence proving the status of its search for other bids, regulators should reject claims that more time is needed.

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Also Tuesday, a Chicago court delayed until later this week a ruling on whether to allow BHP to keep confidential information about its takeover bid for Potash, including "sensitive" communications with government officials.

Potash Corp. filed a lawsuit against BHP in September, alleging that the world's largest miner plotted for years to drive down Potash's share price to gain control of the company at a cheaper price. BHP denies the allegations. A hearing on the lawsuit is scheduled for Thursday.

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Brenda Bouw is a freelance writer and editor based in Vancouver. She has more than 20 years of experience as a business reporter, including at The Globe and Mail, The Canadian Press, the Financial Post and was executive producer at BNN (formerly ROBTv). Brenda was also part of the Globe and Mail reporting team that won the 2010 National Newspaper Award for business journalism. More

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