Threat to BHP Billiton's Potash bid grows in China

BHP Billiton was today facing the prospect of a full-blown battle for fertiliser group PotashCorp as China's Sinochem hired bankers for a possible rival bid.

Deutsche Bank and Citigroup are advising Sinochem on a challenge to mining giant BHP's A$39 billion (£23.7 billion) takeover bid for Canada's Potash, the world's largest fertiliser maker. State-owned Sinochem has reportedly approached Singapore's sovereign wealth fund Temasek Holdings to join a consortium.

The Chinese, who buy about 7% of Potash's annual output, are said to fear that a BHP takeover could push up the cost of crop nutrient. BHP launched its formal bid on August 18 with an all-cash offer at a 20% premium to Potash's share price.

Canadian regulators want more information about BHP's bid, and a deadline for approval of the deal has been pushed back to November 18.

Shares in the Anglo-Australian firm today rose 39.5p to 1999p amid signals from BHP boss Marius Kloppers that it would not "overpay".