BHP's show of strength in Potash bid
The world's biggest miner is set to report a 50 per cent jump in second-half profit to $6.9bn, sending a loud warning shot towards Potash, which is trying to line up white-knight bidders to fend off the world's largest miner.
"Clearly it's going to be a very good result ... The balance sheet is in excellent shape and the cash flow will be significant," said James Bruce, a portfolio manager at Perpetual Investments, which owns BHP shares.
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Hide AdOn Monday, Potash, the world's biggest fertiliser company, talked up the chances of a counterbidder, in a move analysts said might be aimed at coaxing a higher bid from BHP.
A report said global miner Rio Tinto might be considering a bid for Potash with a Chinese partner.
Yet investors, analysts and bankers have played down the chances of Rio bidding for Potash as it has only just slashed $40bn in debt from an ill-timed takeover of Alcan in 2007 and plans to spend $13bn on projects through 2011.
"I would be very surprised," said Adam Dixon, portfolio manager at Ausbil Dexia, which owns BHP and Rio shares.