Business Blog Posts

Chief Financial Officer Alex Vanselow, speaking in an Australian television interview, also said the hostile bid had been timed to ensure more ready access to credit markets.

"The opportunity in Potash is that we are now in a situation that our balance sheet allows us to raise the credit necessary to buy, the valuations match, and basically if you look at the landscape of competitors, theyre not in the same position as we are," Vanselow told ABCs Inside Business show.

"So youve taken all this into consideration -- you can see this is an opportune time to make a bid."

BHP, the worlds biggest miner, unveiled its biggest half-year profit in two years on Wednesday, with just $3.3 billion in net debt and gearing at a low 6 percent, putting it in a strong position to raise its offer if necessary.

Potash Corps shares last traded 14 percent above BHPs offer price, as investors bet that BHP will have to pay more or another bidder will emerge, but Vanselow said there was no need for BHP to raise its offer of $130 a share.

"There is only one offer on the table, so why would we compete against ourselves?"

Rival miner Rio Tinto is considered unlikely to make a counterbid as it has only just recovered from a mountain of debt it took on for its $38 billion takeover of Alcan three years ago. Rio Tinto has since said that it would only consider smaller acquisitions.

Brazils Vale, which is building a potash business, has said it is not looking at Potash Corp.

That has stoked speculation that the only potential counterbidders would include a player from China, the worlds biggest importer of potash, a key nutrient needed to boost crop yields as food consumption soars.

Chinas largest fertilizer distributor, Sinofert Holdings Ltd, said on Thursday it was worried a BHP takeover of Potash Corp would have a big impact on the company but would not say if its parent, Sinochem, was planning a rival offer.

BHP CEO Marius Kloppers is in North America, set to meet with BHP shareholders to discuss the bid and the groups results. He is expected to start wooing Potash Corp shareholders, many of whom are also BHP stakeholders.

A Reuters survey indicated Potash shareholders would accept $162 a share.

Under UK listing rules, the $39 billion offer does not need a BHP shareholder vote as it is worth less than 25 percent of BHPs market value of $188 billion the day before the bid was launched.

But if the bid were sweetened, the 25 percent threshold would apply to BHPs market value on the day before the announcement of the higher offer. Based on BHPs market value on August 27, an increase of just over 10 percent in the bid to $43 billion would be enough to trigger a BHP shareholder vote.

Vanselow said BHP would also look into what happened at Santander, the euro zones largest bank and an adviser on BHPs bid, after one of the banks employees was charged by the U.S. Securities and Exchange Commission with insider trading in Potash Corp securities ahead of the bid.

Asked if BHP would hesitate to use Santander again, he said: "I think we will investigate what happened, well get the feedback from Santander and then well decide on that."

Reporting by Sonali Paul; Editing by Mark Bendeich

The document outlines EU positions ahead of a Group of 20 deputy finance leaders meeting in Gwangju, South Korea, September 4-5. South Korea will host a G20 leaders summit in November.

The 13-page document addresses issues including the economic outlook, governance of the International Monetary Fund, financial regulatory reform, and climate change. The draft was undated, and it was not clear whether EU officials had approved it.

The EU sounded somewhat upbeat on Europes economic prospects, but raised concerns about growing risks in the United States and Japan, the document shows. The draft also reflects some frustration with Chinas slow progress in allowing its currency to appreciate.

China announced in June that it would loosen its grip on the tightly managed yuan, which the United States and Europe say Beijing keeps artificially low to support exports.

"A vigorous implementation of this policy is now necessary," the draft statement said. "Unfortunately, so far, only limited progress has been made."

It said a stronger yuan would be in Beijings best interest because it would help prevent the Chinese economy from overheating and creating asset price bubbles.

UNCERTAINTY GROWS

The EU draft said the global economic recovery remained fragile and uneven across countries and "downside risks have increased in the U.S. and Japan."

Since the last G20 summit in Toronto in June, the U.S. economy has shown signs of faltering while Europes growth has been stronger than expected.

Global stock markets stumbled in August in part because of worries that the U.S. economy could slip back into recession, although Federal Reserve Chairman Ben Bernanke insisted on Friday that modest growth would continue through this year and the pace would likely pick up next year.

In Japan, the yens leap to a 15-year high has raised concerns that its export-led recovery might fade. Japanese Finance Minister Yoshihiko Noda said on Saturday he was ready to employ "all possible measures" to shackle the yen, which tends to strengthen in times of global economic uncertainty.

The EU draft said Europes economy was "performing somewhat better than expected" and praised recent stress tests of Europes largest banks for raising investor confidence in the health of the financial system.

Reprising a theme from the Toronto G20 summit, the document said the EU was following a "growth-friendly" path toward repairing debt-bloated government finances, and prodded the United States and Japan to pare their own deficits and debt once economic recovery is assured.

That was a source of transatlantic friction earlier this year when the White House chided Germany in particular for pulling back its fiscal support too swiftly. The United States warned that switching to austerity too soon might jeopardize the economic recovery.

On IMF governance, another area of disagreement between the United States and Europe, the draft gives no indication that the EU is willing to give up seats on the IMFs executive board in order to give greater voice to fast-growing emerging economies such as China.

The draft showed the EU supports shifting slightly more than 5 percent of IMF quota shares to "underrepresented" emerging and developing economies, but wants to keep the size of the executive board unchanged.

Reporting by Reuters G20 team

A wave of strikes in China have hit Japanese companies and their suppliers in particular in recent months.

The issue was raised in a meeting between senior officials from both countries in Beijing on Saturday, Japanese Foreign Ministry spokesman Satoru Satoh told a news conference.

Chinese officials, Satoh said, suggested that, whatever view Beijing took of the strikes, it saw rising wage demands as unavoidable as low-paid migrant workers seek to gain ground in the growing economy.

"The Chinese side responded by explaining that the request for increasing wages by workers is understandable," Satoh said, summarizing the talks, led on the Chinese side by Vice Premier Wang Qishan.

The Chinese officials said workers had held back on wage expectations during the worst of the financial crisis that rippled across the globe from 2008, Satoh said.

Beijing has been lifting minimum-wage levels across the country as it tries to boost domestic consumption to make it a driver of economic growth, and ease Chinas reliance on exports.

The Japanese spokesman said the wave of strikes, which he said affected more than 100 companies, raised questions about labor laws and industrial relations rules that his government would pursue in subsequent talks.

The disputes and wild-cat strikes were concentrated in southern China, which produces many of the countrys exports. It hit mostly foreign-owned factories, including suppliers to Honda Motor Company 7267.T and its bigger rival Toyota 7203.T.

The strikers mostly belonged to Chinas 150 million strong migrant labor workforce, which flows from villages to cities and industrial regions looking for work.

Chinese law neither explicitly bans nor allows strikes. Beijing put aside its usual wariness of social unrest and did not crack down harshly on much of the recent industrial action.

Reporting by Chris Buckley; Editing by Jon Hemming