DBRS Comments on BHP Billiton Bid for Potash Corporation

DBRS today notes Canada’s Minister of Industry, the Honourable Tony Clement, has sent notice to BHP Billiton Development 2 (Canada) Limited (BHP Billiton D2) that he is not satisfied that its proposal to acquire Potash Corporation of Saskatchewan Inc. (Potash Corp.) is likely to be of net benefit to Canada. Accordingly, BHP Billiton D2 has 30 days to make any additional representations and submit any undertakings to Mr. Clement. At the end of the period, Mr. Clement will make a final decision on the prospective net benefit to Canada of the takeover proposal. If the Minister of Industry determines the takeover has no net benefit to Canada, the bid for Potash Corp. will not be able to proceed.

BHP Billiton plc (BHP Billiton), the indirect sole owner of BHP Billiton D2, has indicated today that it believes the takeover proposal is of net benefit to Canada and will continue to cooperate with the Minister of Industry and review its options. In response to Mr. Clement’s announcement, Potash Corp. yesterday reiterated its view that the BHP Billiton offer is wholly inadequate.

DBRS believes the announcement significantly reduces the likelihood that BHP Billiton’s bid for Potash Corp. will be successful, but since BHP Billiton’s offer for Potash Corp. remains active, DBRS is maintaining the AA (low) and R-1 (middle) ratings of BHP Billiton Ltd. and BHP Billiton Under Review with Negative Implications and the BBB (high) and R-1 (low) ratings of Potash Corp. Under Review with Developing Implications, where they were placed on August 19, 2010, and August 17, 2010, respectively.

Notes:
The applicable methodology is Rating Mining, which can be found on our website under Methodologies.