BHP denies any plans to divest Potash Corp assets

TORONTO (Reuters) - BHP Billiton, denied on Monday that it had plans to sell off some of Potash Corp's assets if it succeeded in its $38.6 billion hostile bid for the world's largest fertilizer producer.

The Australian Financial Review and Reuters ran reports over the weekend quoting an analyst note that said BHP may consider a sale of Potash Corp's nitrogen and phosphate assets in the event of a deal.

Potash comprises about 70 percent of the fertilizer assets owned by the Saskatoon, Saskatchewan-based company, with the rest made up of the other two fertilizer types.

"At this stage BHP Billiton has no plans to sell any Potash Corp assets. Our offer is for the whole company, including the phosphate and nitrogen businesses," a BHP spokesman said, referring to Potash Corp.

The analyst, Mark Gulley of Soleil Securities, wrote his note late last week after a BHP briefing with analysts and investors.

"BHP said that 70 percent of the value is in the potash assets and that over time it would probably look to possibly divest the nitrogen and perhaps the phosphates business," Gulley wrote.

BHP officials have been touring North America to tout the benefits of its proposal to its own shareholders and Potash Corp's. Many investors own shares of both companies.

Potash Corp's rejection of the $130-a-share offer has raised speculation that BHP, the world's largest miner, will have to raise its bid significantly to clinch a deal.

That has led analysts and investors to speculate that BHP may quickly offload any Potash Corp assets that it considers outside of its long-term plans.

BHP's spokesman denied that the company would have to follow that course of action.

"Our financing is not dependent on asset sales and we do not require divestments to maintain balance sheet strength," he said.

Shares of Potash Corp were up 61 Canadian cents at C$155.60 in afternoon trade on the Toronto Stock Exchange.

The company's shares have risen 33 percent since the BHP offer was made public on August 17 and now stand 20 percent above the bid price, signaling anticipation of a higher offer eventually.

OUTSIDE INTEREST

If BHP opts to eventually sell any Potash Corp assets down the line, it is likely to generate sizable interest among strategic buyers.

Agrium Inc, a Canadian fertilizer maker and farm products retailer, has already indicated that it would consider buying Potash Corp's nitrogen and phosphate assets, which are worth an estimated $12 billion.

Agrium Chief Executive Mike Wilson told Reuters on Monday that his company was strong financially and would look at any assets up for grabs.

"We are a global company that produce 8 million metric tons of nitrogen, phosphate and potash and markets 16 million, so any assets that came on the market that fits with us we would certainly look at," he said.

Agrium is in the midst of finalizing a $1 billion takeover of Australian wheat exporter AWB Ltd, just months after it was forced to back-out of a hostile-bid for CF Industries, a U.S.-based fertilizer producer.

Both Agrium and CF, along with Terra Industries and Norway's Yara, were involved in a year-long four-way takeover battle. It ended after the $4.7 billion CF-Terra deal scuppered Agrium's plan to snap up CF, while forcing Yara to bow out of a bidding war for Terra.

($1= $1.06 Canadian)

(Reporting by Euan Rocha; Editing by Frank McGurty)

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