We haven't heard much from BHP Billiton
Once that move was made, analysts began speculating about companies that might cough up competing offers. But the most frequently mentioned names, Rio Tinto
From there the speculation has moved to Chinese interests -- especially to state-owned chemical company Sinochem Corp. -- or to the likelihood of a sweetened offer from BHP Billiton. But the Sinochem possibility elicits extreme caution in Saskatchewan.
Brian Wall, the province's premier, has essentially stated that control from China of the world's biggest potash producers would be less than ideal, especially given China's status as one of the world's largest potash importers. As such, the country has a vested interested in maintaining low prices for the key fertilizer ingredient, which accounts for 15% of Saskatchewan's budget. Mr. Wall's comments were reinforced by his energy minister, who said that the province would have "lots of concerns" about a Chinese stake in PotashCorp.
Nevertheless, China buys about 7% of PotashCorp's output, and so Sinochem's apparently having hired HSBC to advise it of its options has gained more than a little attention. But a close follower of the situation has said this doesn't necessarily mean that a Sinochem bid is likely. After all, China will be cautious about saving face, after being rebuffed by Rio Tinto in a $19.5 billion offer for an increased stake in the big miner last year.
So, despite PotashCorp holding a 22% interest in Sinochmen's fertilizer unit, Sinofert Holdings, and while PotashCorp and Sinochem have apparently held unspecified talks following BHP Billiton's offer, I'm still betting on the Australian company emerging victorious.
I realize that this is all ultimately about the importance of food, and that China is highly concerned about feeding its population. But the Saskatchewan officials' comments were sobering, and with a higher offer, solidly run BHP Billiton should be in the driver's seat.
Fool contributor David Lee Smith doesn't own shares in any of the companies named above. He does welcome your questions or comments. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.