An American judge is allowing the discovery process to proceed in a lawsuit filed by Potash Corp. of Saskatchewan Inc. to fend off BHP Billiton's $39 billion hostile takeover bid.
The lawsuit, filed in a U. S. District Court in Chicago, alleges BHP misrepresented material facts related to its bid for the world's largest producer of potash.
"I would expect that discovery is likely to lead to an amended complaint and new allegations of disclosure violations," said John Coffee, a professor at Columbia Law School in New York.
PotashCorp, which is based in Saskatoon, has flatly rejected BHP's bid as "grossly inadequate."
The company has said it has been approached with alternative proposals and BHP's offer had "no traction whatsoever" with shareholders.
As part of the discovery process, PotashCorp has asked BHP to produce a long list of documents. This includes BHP's statements regarding investments in the potash industry and the minutes of BHP's board meetings that relate to the potash sector.
BHP was also asked to provide any documents on its plans to develop its Jansen potash project in Saskatchewan.
The company has also requested that some of BHP's top executives present depositions in the matter.
Judge David Coar said a hearing on PotashCorp's request for a preliminary injunction to block BHP from proceeding with its tender offer would be November 4, ahead of the November 18 deadline on BHP's bid.
from Western Investor, November 2010
