Canada plans new guidance on takeovers after Potash row

Canada’s prime minister said his government plans to provide “guidance” to investors on what kinds of foreign takeovers it will tolerate, after the country rejected Melbourne-based BHP Billiton’s bid to acquire Potash Corporation of Saskatchewan.

Stephen Harper, speaking to reporters today at the APEC summit in Yokohama, Japan, said he will outline the policy once a 30-day appeal process for BHP ends. Harper this week also attended a summit of Group of 20 leaders in Seoul, where he held bilateral talks with Australian Prime Minister Julia Gillard.

“When the period expires, the government will be in a position not only to give reasons for the decision but to give broader guidance to the investment community on the kind of foreign investment it is and is not seeking within Canada,” Harper said. Harper’s government rejected BHP’s $40 billion bid on November 3, saying the proposal doesn’t provide a “net benefit” to Canada. Under Canadian law, BHP has 30 days from the date of the ruling to appeal.

Harper said that while Gillard raised the issue in discussions this week, no other G-20 or APEC leader brought up Canada’s decision.

‘Open investment’ regime
“It’s important to note that Australia has exactly the same kind of review process for such acquisitions,” Harper said, adding that Canada has had one of the most “open investment regimes” in the world.