PotashCorp wants control of Israel Chemical, not just a larger stake, CFO says

TORONTO – PotashCorp (TSX:POT) wants to acquire a controlling interest in Israel Chemical Ltd., not just increase its 14 per cent stake, chief financial officer Wayne Brownlee says.

“We’re not interested in increasing our stake and still being a passive minority shareholder. In fact, that’s not a tenable position for us on a long-term basis in any event,” he told an investment conference in Florida on Tuesday.

“The minimum position would be to have a majority control position. On a longer-term basis, a 100 per cent would be preferable if we could do that.”

Brownlee said talks toward a deal have been on hold due to Israel’s recent elections, but the company remains interested.

Potash Corporation of Saskatchewan Inc. confirmed late last year that it held talks with Israeli government officials about increasing its stake in Israel Chemical. However, no deal has been formulated.

The Canadian company sought to increase its stake in ICL earlier last year from about 14 per cent to 25 per cent, but dropped its attempt in the summer after delays in a government review process.

Brownlee said Tuesday that PotashCorp continues to feel it has much to offer if it would to acquire a controlling stake in the company which mines potash from the Dead Sea and the Negev desert, as well as in Spain and England.

“The opposition that we’re seeing right now is really based on what I would call fear of the unknown. We really have not spent any time yet talking with the stakeholders in Israel,” Brownlee said.

“We’ve been sort of sitting out in an election period. Now we’re sitting out in a coalition formation period in the Israeli government, so that they have a sense of what they’re doing.”

Although PotashCorp holds a 14 per cent stake, it does not have any seats on the ICL board. Israel Corp. owns roughly a 52.3 per cent interest.

Israel Corp. is that country’s largest holding company with investments in energy, transportation, shipping and technology.