Chinese unlikely to fund bid for Potash Corp

Bernstein analyst Paul Galloway said getting the financial clout needed to improve on the terms of the biggest takeover bid this year required either aligning a diverse consortium or relying on the politically contentious backing of China.

The latest in weeks of speculation about ways BHP could be stymied saw reports that Canadian and Singaporean funds were talking about a possible deal, that China's preferred counterbidder was canvassing an Indian partner, and that Potash itself was examining a huge payout. On that, Mr Galloway said Potash would find it challenging to demonstrate it can deliver more value by returning cash to shareholders.

Liberum Capital analysts said: "With six weeks to go before the BHPB offer closes it is clear that the Chinese look unlikely to enter the fray and the schemes being tabled now are becoming increasingly political, complex and difficult to execute."