Federal government rejects Potash Corp. takeover

This is good news:

The federal government has rejected BHP Billiton's $40 billion hostile takeover of Potash Corporation of Saskatchewan.

Industry Minister Tony Clement said Wednesday Canada wants to attract investment and business, but "some decisions can only be made once … and there's no turning back, ever."

From the Globe. Of course, this is purely to protect Conservative votes in Saskatchewan and neighbouring provinces; if they'd acted on their free market principles they'd have allowed it to go through. Nonetheless, I'd much rather they did the right thing for the wrong reasons than the wrong thing for the right reasons.

Meanwhile, others are interested in stepping up to the plate:

The CEO of a Toronto-based merchant bank has been travelling the globe in recent weeks on behalf of a group of Saskatchewan First Nations, securing an estimated $25 billion in preparation for a bid to rival the hostile takeover attempt of Potash Corp. of Saskatchewan Inc. by BHP Billiton Ltd.

"We feel the First Nations have a great concept. The idea they have is brilliant. We are looking at capital all over the world," Forbes & Manhattan CEO Stan Bharti said in a telephone interview Tuesday from Miami, where he is meeting with a group of Brazilian investors.

The Indigenous Potash Group, a collection of Saskatchewan First Nations, is preparing a rival bid, said group CEO Ken Thomas. It enlisted Forbes & Manhattan and Toronto-based GMP Securities to find investors and raise the money, Thomas said.

From the Saskatoon Star-Phoenix. This sounds like it could be a very good thing for all concerned.

Harper's free market principles may have their limits

BHP's bid for Potash Corporation has put our "fearless" leader in a bit of a bind:

Weighty political opposition to the Potash Corp. takeover from Stephen Harper's hometown of Calgary is complicating the task of reviewing BHP Billiton's bid, Conservative insiders say.

As one senior Tory tells The Globe, this Alberta-based backlash to the BHP deal has ended up broadening the political calculations for Ottawa beyond Saskatchewan.

Richard Haskayne, a veteran of Canadian boardrooms who's helmed several of this country's biggest companies, is one Calgary businessman who's been pressing Tory MPs and cabinet ministers to reject the takeover.

“My neighbour, two doors down, is Jim Prentice and he knows where I stand,” said Mr. Haskayne, after whom the University of Calgary's business school is named.

The Harper government has set itself a deadline of November 3 to rule on the acquisition. It must decide whether the deal is what foreign-takeover legislation calls a “net benefit” to Canada.

From the Globe. Now for what it's worth, I agree with those who say the government should intervene; however this must create a certain amount of cognitive dissonance for Harper...