Canadian fertilizer giant PotashCorp sought to calm fears
among Israel Chemicals workers over its plans for it smaller rival as it
revealed it was interested in taking a 100% stake, worth $16bn at current values.
Wayne Brownlee, the PotashCorp chief executive, clarified
the group's position in a long-standing effort to increase its stake in Israel
Chemicals, known as ICL, from 13.8%, saying it was intent on winning control.
"We're not interested in increasing the stake and still
being a passive minority shareholder," Mr Brownlee told an investor conference.
"The minimum position would be to have a majority control
position," he said, citing a desire for at least a 51% stake.
"On a longer-term basis, a 100% would be preferable if we
can do that."
The group's latest efforts to raise its holding in ICL – a campaign
dating back to when PotashCorp bought its stake in 1998 – have been hampered by
January elections, which have sidelined talks with the Jerusalem government,
which holds a golden share.
Benjamin Netanyahu, the Israeli prime minister, is still
trying to piece a coalition government.
However, Mr Brownlee that PotashCorp's quest for control of
ICL "is not, and would not be, a hostile attempt".
He said: "This would be negotiated that would have to be in
the interest of all stakeholders," including ICL workers, who last week
threatened to strike should a takeover be approved.
'Not about job cuts'
Mr Brownlee attempted to ease fears that a takeover would
lead to mass redundancies, saying that the financial benefit of a deal would come
from improved potash marketing.
"Clearly, the rationale for us to embark on that transaction
if we can get there is more regard to marketing and being the lowest cost
delivered supplier to anywhere in the world, which is a pretty powerful
"It really isn't about production cuts, it's not about
reduced employment. This really is a marketing story, it's a distribution
logistics story, and we think that once we present those credentials we might
be in a better position."
The comments came after the close of Tel Aviv's stock
market, where ICL shares closed down 2.5% at 47.32 shekels on Tuesday, giving the group a stockmarket value of $16.2bn.
Shares in PotashCorp, which two years ago was protected by Canada's government from a takeover by Anglo-Australian BNP Billiton stood 0.3% higher at Can$39.79 in
afternoon deals in Toronto.
Israel Chemicals itself announced a foreign acquisition on
Monday, agreeing to acquire the phosphorus pentasulfide, or P2S5, business
assets and operations of German-based Thermphos International.