Foreign takeover rumour of Sask. potash company Nutrien a non-starter, says prof

More than 11 years after a failed takeover,Australian mining giant BHPcould once again have its eyes onSaskatoon-basedNutrien, the world's largest fertilizer maker.

Don Bilson, head of event-driven research at New York-based Gordon HaskettResearch Advisors, made the suggestion this week in an interview with Bloomberg.

The speculation follows a leadership change earlier this month at Nutrien, which sawKen Seitz, executive vice president and CEO of potash for the company, become theinterim CEO, after Mayo Schmidt left the top job.

"One would think the time is right for NTR's (Nutrien's) board to consider its options," Bilsonsaid. "Obviously, NTR wouldn't need to find a new CEO if it is sold, and it just so happens that a predator that tried to buy a big piece of NTR once before is looking again."

Search underway

No one from BHP could be reached Thursday. And a Nutrien official declined to comment, saying the company "doesn't comment on speculation or rumour."

Nutrien, which hasn't commented on Schmidt's exit after less than a year in the position,has said a global search for a new CEO is underway.

Brooke Dobni, a professor in the University of Saskatchewan's Edwards School of Business, said the idea of Nutrien being a takeover target is "a non starter."

"From a business perspective, it does make sense," Dobni said."Itwould make senseif BHP's priority is growth.

"But I just don't think it could happen. It's a non-starter."

Dobni said BHP is one of the few mining companies with the "deep pockets" to consider a multi-billion dollar bid. And with the BHP board'sapproval to develop its Jansen mine east of Saskatoon, there would be efficiency in one company owning and operating the majority of the mines.

He said Nutrien may also be an attractive asset because of the tightening supply and rebounding world market for potash.

But the Saskatchewan and federal governments, as well as the public, don't want to give up control of a "strategic asset" like potash to a foreign company, and Nutrien is the world's largest producer. He said any move would likely fail, as did an aggressive, high-profile bid just over a decade ago.

"It's as much or more a political issue as a business one," he said.

In August2010, BHP, then known as BHP Billiton, madean all-cash bid for Nutrien, then known as Potash Corp., worth an estimated US$38.5 billion, or $130 a share. PotashCorp rejectedthe bid as "grossly inadequate."

The following day, BHP vowed to take its bid directly to shareholders.

TheSaskatchewan governmentcommissioneda study concluding there would be a $2-billion government revenue drop over 10 years if the takeover went ahead. Then-premier Brad Wall voiced strong opposition to the deal and went to Ottawa to lobby the federal government. Liberal Opposition MPs also encouraged the Stephen Harper government to reject it.

In November2010, the federal government blocked the takeover, and BHP withdrew its bid.