Business Blog Posts

BEIJING (Reuters) � Chinese chemical conglomerate Sinochem Group has formally asked the government to back a bid for Canada's Potash Corp (POT.TO) (POT.N), a local newspaper reported on Sunday.

The Economic Observer cited sources close to the deal as saying that, according to a preliminary assessment, Sinochem would need $40 billion to $60 billion to trump a $39 billion hostile offer by BHP Billiton (BHP.AX)(BLT.L) for Potash Corp.

The amount would be too much for Sinochem, which reported $25 billion in total assets at the end of 2009, the Beijing-based weekly newspaper cited analysts as saying.

In its application to the government, Sinochem argued that Beijing should back a bid for the Canadian firm because potash is key to China's national food security, the paper said.

The Economic Observer's story chimes with a report last Friday by the Globe and Mail in Toronto that Sinochem was trying to drum up support for a Chinese-led bid for Potash Corp.

Sinochem is the parent of China's largest fertilizer company, Sinofert (0297.HK).

Sources told Reuters last week that Sinochem Corp had invited Singaporean state investor Temasek Holdings (TEM.UL) to join a consortium exploring a bid for Potash Corp.

China, which typically buys about 7 percent of the output of Potash Corp, fears a BHP takeover might push up the cost of fertilizers that it will need to produce food for its huge population in coming years.

China's Ministry of Commerce said last week that it would pay close attention but that it had not received any material or information from a Chinese enterprise regarding the deal.

(Reporting by Zhou Xin and Alan Wheatley, editing by Miral Fahmy)

SAN FRANCISCO (Reuters) � Indian conglomerate Sahara India Pariwar is in discussions about buying the debt of struggling film studio Metro-Goldwyn-Mayer for $1.5 billion to $2 billion, according to two people familiar with the matter.

The sources did not elaborate on Sahara India Pariwar's plans for MGM, which has about $4 billion in debt, and stressed that the talks were still at a preliminary stage.

"On mutual interest discussions are on but it's too early to comment on the issue," said Abhijit Sarkar, corporate communications chief of Sahara India Pariwar, which owns businesses in media, entertainment, real estate and insurance.

MGM could not immediately be reached for comment.

Earlier this month, MGM said that it won extra breathing room to make its debt payments, with its lenders agreeing not to seek remedies for nonpayment of debt until October 29.

One source told Reuters that Sahara India Pariwar was contemplating a nearly $2 billion, all-cash deal for MGM's debt. Another source pegged the deal at roughly $1.5 billion.

MGM has a film library that includes the James Bond and Pink Panther franchises, but it has been struggling to create new hits. It is also coping with plunging DVD sales as consumers move to viewing online.

The studio is saddled with debt from a $2.85 billion buyout in 2005 by a group that included private equity firms Providence Equity Partners, TPG, Quadrangle Group and DLJ Merchant Banking Partners, and media companies Sony Corp and Comcast Corp.

(Reporting by Tony Munroe and Alexei Oreskovic; Editing by Eric Walsh)