BHP blow as Canada says no to Potash takeover

THE Canadian government yesterday blocked BHP Billiton's £24bn bid for Potash Corp and left little room for a new offer.

Canada said the deal would not benefit the country, delivering a major blow to BHP chief executive Marius Kloppers after the failure of a bid for rival Rio Tinto in 2008 and the collapse of an iron ore joint venture with Rio earlier this year.

BHP investors are betting the Anglo-Australian miner will now return capital through a share buyback or expand its interest in oil and gas to put its growing cash pile to work.

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While Canada gave BHP 30 days to come up with additional proposals that might make its hostile bid for the world's largest fertiliser producer more palatable, the chances of a successful modified offer appeared remote.

"Marius Kloppers is going to be pretty frustrated.

"BHP is of a size now where just about anything it wants to do of any substance is going to get blocked on regulatory grounds," said Cameron Peacock, market analyst at IG Markets in Melbourne.

The decision also angered some Potash investors.

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