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What Do You Do With Potash Now?

Thursday, 4 Nov 2010 | 5:30 PM ET

If you’re among the many investors who gobbled up Potash as an M&A play what do you do now?

This week the government of Canada blocked BHP Billiton’s hostile takeover attempt -- at $130 a share -- because it didn’t provide a “net benefit” to Canada.

Under Canadian law, the company has 30 days to appeal the ruling.

When asked about the surprise move, Industry Minister Tony Clement said he is “forbidden” by the law to give the detailed reasons for the rejection until the appeal period is over. “Believe me, I will do so with alacrity at that moment,” he said in a Bloomberg report.

As you might remember, this summer Australia-based BHP made an unsolicited $38.6 billion offer for Potash - the world's largest fertilizer producer in what was described by the WSJ as “an aggressive wager that developing economies will drive up demand for the world's food supply. “

Potash is an important nutrient that replenishes soil and increases farmland's crop yield. Global potash supplies are relatively limited, and Potash Corp., based in the prairies of central Canada, controls approximately 20% of the supply.

Whither Potash
What to think about Potash, now that the BHP takeover of Potash has been rejected by the Canadian government, with the Fast Money traders.

What’s the trade?

It’s amazing to me that Potash didn’t trade sharply lower, says Karen Finerman. But I think Potash is now un-buyable.

BHP will probably look to make another acquisition but I’m hard pressed to think they'll look at a company based in Canada, adds Steve Cortes.

I wonder if this is a sign of a resource war coming, adds Brian Kelly. It says to me Canada doesn’t want to lose a prized resource.




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Trader disclosure: On November 4, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Cortes is short (AAPL); Cortes owns (GOOG); Cortes owns (K); Cortes owns (TSN); Cortes owns (CLX); Cortes owns U.S. Treasuries; Cortes owns U.S. Dollars; Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Finerman's Firm Is Short (IJR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (IWM); Finerman's Firm Is Long Russell 2000 Puts; Finerman's Firm Is Long S&P 500 Puts; Finerman Owns (AAPL); Finerman's Firm And Finerman Own (BAC); Finerman's Firm Owns (CMI); Finerman's Firm Owns (M); Finerman's Firm Owns (MCD); Finerman's Firm Owns (SKS); Finerman's Firm Owns (HAIN); Finerman's Firm Owns (YUM)

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  Price   Change %Change
BHP
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POT
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