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BHP Billiton denied
on Monday that it had plans to sell off some of Potash Corp’s assets if
it succeeded in its $38.6 billion hostile bid for the world’s largest
fertilizer producer.

The Australian
Financial Review and Reuters ran reports over the weekend quoting an
analyst note that said BHP may consider a sale of Potash Corp’s
nitrogen and phosphate assets in the event of a deal.

Potash comprises
about 70 percent of the fertilizer assets owned by the Saskatoon,
Saskatchewan-based company, with the rest made up of the other two
fertilizer types.

“At this stage, BHP
Billiton has no plans to sell any Potash Corp assets. Our offer is for
the whole company, including the phosphate and nitrogen businesses,” a
BHP spokesman said, referring to Potash Corp.

The analyst, Mark Gulley of Soleil Securities, wrote his note late last week after a BHP briefing with analysts and investors.

“BHP said that 70
percent of the value is in the potash assets and that over time it
would probably look to possibly divest the nitrogen and perhaps the
phosphates business,” Gulley wrote.

BHP officials have
been touring North America to tout the benefits of its proposal to its
own shareholders and Potash Corp’s. Many investors own shares of both
companies.

Potash Corp’s
rejection of the $130-a-share offer has raised speculation that BHP,
the world’s largest miner, will have to raise its bid significantly to
clinch a deal.

That has led
analysts and investors to speculate that BHP may quickly offload any
Potash Corp assets that it considers outside of its long-term plans.

BHP’s spokesman denied that the company would have to follow that course of action.

“Our financing is not dependent on asset sales and we do not require divestments to maintain balance sheet strength,” he said.

Shares of Potash
Corp were up 61 Canadian cents at C$155.60 in afternoon trade on the
Toronto Stock Exchange. The company’s shares have risen 33 percent
since the BHP offer was made public on August 17 and now stand 20
percent above the bid price, signaling anticipation of a higher offer
eventually.

Outside interest

If BHP opts to
eventually sell any Potash Corp assets down the line, it is likely to
generate sizable interest among strategic buyers.

Agrium Inc, a
Canadian fertilizer maker and farm products retailer, has already
indicated that it would consider buying Potash Corp’s nitrogen and
phosphate assets, which are worth an estimated $12 billion.

Agrium chief
executive, Mike Wilson, told Reuters on Monday that his company was
strong financially and would look at any assets up for grabs.

“We are a global
company that produces 8 million metric tons of nitrogen, phosphate, and
potash and markets 16 million, so any assets that came on the market
that fits with us we would certainly look at,” he said.

Agrium is in the
midst of finalizing a $1 billion takeover of Australian wheat exporter,
AWB Ltd, just months after it was forced to back-out of a hostile-bid
for CF Industries, a U.S.-based fertilizer producer.

Both Agrium and CF, along with Terra Industries and Norway’s Yara,
were involved in a year-long four-way takeover battle. It ended after
the $4.7 billion CF-Terra deal scuppered Agrium’s plan to snap up CF,
while forcing Yara to bow out of a bidding war for Terra.