BHP `confident` it can meet Saskatchewan`s concerns over Potash Corp. takeover
TORONTO — BHP Billiton Ltd. said Wednesday it is "confident" it can meet concerns raised by the Saskatchewan government, which has said it would lose billions of dollars of tax revenue in a takeover by the Australian-based mining giant of Potash Corp. of Saskatchewan Inc.
BHP issued the statement after Saskatchewan on Tuesday rejected the proposed takeover of Potash Corp., saying BHP refused to meet the province`s demands, putting the approximately $40-billion U.S. offer in jeopardy.
"The province of Saskatchewan has stated that it will lose $3 billion in revenue as a result of the acquisition of Potash Corp.," BHP said. "The province`s concerns arise primarily from tax deferrals, which are fully permitted under existing laws in Canada, and this was recognized by the Conference Board of Canada in its report commissioned by the province.
"Nonetheless, BHP Billiton is confident it can address this concern and, in this regard, is prepared to make commitments which go beyond the requirements of prevailing Canadian legislation that should effectively address the tax loss concerns of the province."
For weeks, the Saskatchewan government has expressed doubt that BHP`s bid for Potash Corp. would provide a "net benefit" to the province. But Tuesday, a source familiar with the transaction confirmed that Saskatchewan will recommend that Investment Canada reject the bid, citing concerns about loss of tax revenue.
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