Potash Corp. of Saskatchewan Inc., the largest producer of its namesake crop nutrient in Canada, is conducting a strategic review of equity investments that have a combined market value of about $4.5 billion.
The review is “something the company does periodically, with the latest one being about two years ago,” Randy Burton, a spokesman, said yesterday by phone. As part of the same process, Potash Corp. has already completed reviews of its potash and nitrogen-fertilizer segments and plans to do the same for its phosphate unit, he said.
“No conclusions have been reached on our equity investments,” Burton said.
The review comes five months after Jochen Tilk become chief executive officer of Saskatoon, Saskatchewan-based Potash Corp., replacing Bill Doyle after 15 years. The company has amassed stakes in rival potash producers including a 14 percent holding in Israel Chemicals Ltd. (ICL) that’s currently valued at about $1.1 billion. Potash Corp. scrapped a proposed bid for the rest of the company in April 2013 following opposition from Israeli workers and politicians.
Israel Chemicals “may no longer meet Potashcorp’s investment criteria,” Greg Barnes and Carey MacRury, analysts at TD Newcrest Inc. in Toronto, said yesterday in a note, citing a meeting between Potash Corp. management and analysts.
Potash Corp. also has minority holdings in Arab Potash in Jordan, China’s Sinofert Holdings Ltd. (297), and Sociedad Quimica & Minera de Chile SA (SQM:US).
In evaluating all of these equity investments, Potash Corp. is considering whether it can influence the other companies, and the likelihood of whether it can gain a controlling stake, Jacob Bout, a Toronto-based analyst at CIBC World Markets, said in a Dec. 1 note.
Potash Corp. gained 0.2 percent to $34.30 in New York yesterday. The shares have risen 4.1 percent this year.
To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Tina Davis