China's Sinochem, that country's largest chemicals trader, is asking its home government to support a competing bid to BHP Billiton's $40 billion hostile offer for Potash Corp. of Saskatchewan, the world's largest fertilizer maker. China's Economic Observer broke the story, citing unidentified sources.
BHP Billiton (BHP), the world's largest mining company, has thus far made the only public offer for Potash, but rumors have persisted that a Chinese bidder would emerge for the Canadian fertilizer giant.
Sinochem would need to bid between $40 billion and $60 billion to trump BHP's $38.6 billion offer for Potash (POT), the Economic Observer reported. That price range would probably be too high for Sinochem to handle on its own, leading the company to seek government backing.
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 reported.
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