PotashCorp/BHP Billiton Turns Into a Brawl
Yesterday, Potash Corporation of Saskatchewan sent out a letter to customers in which it talked a little trash. A little background: BHP has been buying up mining rights in Saskatchewan to develop a greenfield potash mine. There is nothing that PotashCorp executives like more than to talk about how expensive the BHP mine would be.
Here are the good bits of the letter:
We recently learned that Chris Ryder, director of potash marketing for BHP Billiton, has begun to cold call many of you. Since the purpose of BHP Billiton’s call clearly was not to solicit your potash order from BHP Billiton’s Jansen project—a multi-year Greenfield project which BHP is not even proposing to take to its own Board of Directors for approval until 2011—we consider this contact to be inappropriate and highly unethical. We can only assume that BHP Billiton’s purpose is to sow seeds of doubt and confusion about the future of PotashCorp by raising questions about our ability to do business across the nutrient spectrum as well as the future location and makeup of our sales organization.
I am a little bewildered by BHP’s motives here. Chris Ryder is sitting at his desk wondering how BHP can buy PotashCorp without raising its bid too much. He decides the best course of action is to start calling PotashCorp.’s clients? I don’t see how that kind of thing can help. Due diligence, perhaps? It’s really hard to tell because we are getting this second hand from PotashCorp.
Maybe it implies BHP would sell off PotashCorp’s non-potassium containing fertilizers.
Ryder is no low level rogue employee. Most recently, he was marketing director for diamonds at BHP. Perhaps he does have good reasons.