TORONTO, Aug 20 (Reuters) - With a full-page ad in Canada's leading national newspaper, Anglo-Australian miner BHP Billiton BLT.L formally launched its hostile, $39 billion bid for No. 1 fertilizer maker Potash Corp on Friday, starting a race to win over regulators and shareholders within 60 days.
The public relations and media machine will now kick-in in earnest as BHP seeks to have its story laid out in the media and meets with government officials to argue the merits of the investment in Canada's province of Saskatchewan.
'The purchase of the shares contemplated by the offer is a Reviewable Transaction,' BHP Billiton states in an 81-page filing to present its $130-per-share offer to Potash Corp and its shareholders.
BHP Billiton, the world's largest miner, says it will file an application for review of the takeover on Friday under the Investment Canada Act, setting out why it believes the deal will bring a net benefit to Canada. The government has up to 45 days to respond, making an answer likely by Oct. 4.
A Canadian lawyer said on Friday the fact that BHP Billiton put a 60-day time frame on its offer -- the offer expires Oct. 19 but could be extended -- means it probably does not think a rival bid could be filed and approved within that time frame.
'They may have decided they are still comfortable that no one else could get in in under 60 days, given various regulatory and other approvals under the Investment Canada Act and Competition Act,' said the lawyer, a leading expert on Canadian corporate takeover law who asked not to be named.
'It's not going to happen for anybody in less than 60 days, so why not offer 60 days.'
BUMPY ROAD
But BHP Billiton faces a bumpy road as it tries to sell a bid that Potash Corp has rejected as inadequate.
A Reuters poll published on Friday showed that investors in Potash Corp think BHP Billiton will need to sweeten its bid at least 25 percent -- to at least $162 a share -- if it hopes to succeed. At the same time a source said Potash Corp was confident alternative bids would emerge for the leader of a fertilizer sector with such huge growth potential.
BHP Billiton also opted not to make what is known as a 'permitted bid' - a tactic that lets a hostile bidder go directly to shareholders with its offer and avoid the need to ask regulators to strike down a shareholder rights plan.
Potash Corp adopted a 'poison pill' shareholder rights plan this week in response to the BHP Billiton offer, and that plan would trigger a massive dilution in shares if a single investor acquires a stake of more than 20 percent.
The plan includes an unusually long 90-day minimum for a permitted bid, meaning that BHP Billiton could not get shareholder approval before late November and Potash Corp would have more time to find an alternative.
The normal minimum for a permitted bid is 60 days in Canada, with statutory norms for non-hostile bids at 35 days.
BHP Billiton must now ask Canada's provincial securities' commissions to have the shareholder rights plan lifted before it can take up shares tendered to its offer.
Potash Corp, for its part, could scrap the poison pill if a preferred partner -- or 'white knight' -- emerges with a better offer, or if it reaches a friendly deal with BHP Billiton.
WHY GO WITH BHP?
As they examine the application, regulators will want evidence that the takeover will benefit economic activity in Canada, especially in terms of jobs and domestic operations.
BHP must also address the impact of a deal on productivity, technological development, innovation and competition in Canada, and the compatibility of the investment with national and provincial industrial, economic and cultural policies.
'Just given the high profile nature of the transaction, I would think they have their public relations people working full out on this thing,' said the lawyer.
'A lot of meetings are going to be held with government officials and its important when you are doing that to have your story laid out publicly.'
($1=$1.03 Canadian)
(Reporting by Pav Jordan; editing by Janet Guttsman) Keywords: POTASHCORP/REGULATORY (pav.jordan@thomsonreuters.com; 416 941 8099; Reuters Messaging: pawel.jordan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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