Home Capital Markets Is there a message for Potash in NB Power vote?

Is there a message for Potash in NB Power vote?

Remember MacDonald Dettwiler (MDA:TSX)? Not a week goes by when they’re not making news. Several equity research analysts were reporting this week about a new contract that will see MDA lead a team that will design, build and test a Mars Exploration and Science Rover Prototype. The stock’s had a nice run as well, up 50% over the past twelve months. Importantly, none of the research analysts mention Minister Jim Prentice when they publish their share price targets.

Mr. Prentice, of course, was the Federal Conservative Cabinet Minister who blocked the 2008 proposed sale of MDA to foreign interests on the basis of national security.

Down in New Brunswick this week, voters threw out their provincial government over what my morning paper called “control of their resources.” Interestingly, it was the governing Liberals who are out on their ear as a result of the would-be sale of N.B. Power to Hydro-Quebec.

Which brings us to the proposed sale of Potash Corp to BHP Billiton, or some other international player or foreign government investment arm. It may not be an election issue today, but don’t think that campaign strategists in Ottawa haven’t seen the results of the New Brunswick vote.

Early in the process, Saskatchewan Premier Brad Wall boiled it down for the voters in the most clear fashion (via AP):

“The question needs to be, ‘Are Saskatchewan people, are Canadians better off as a result of this, is our economy stronger as a result of this very large deal?'” Wall said.

“We’re doing our homework, we’ll see what all of that due diligence tells us, but as of today I’m having a hard time answering that question in the affirmative.”

Wall said his meeting with BHP Billiton CEO Marius Kloppers was friendly and frank, but he was no more supportive of the hostile takeover bid for Saskatchewan’s biggest company than he was beforehand.

“Is there a net benefit to Canada? We’re going to work through it. One might become apparent, but today I don’t see it,” he said.

The Federal government has agreed to look at the proposed Potash deal, and I’m trying to imagine what the “net benefit to Canada” could be if Potash were sold. As much as the voters have been distracted as many other Canadian firms were sold overseas (see prior post “Where is China’s oil patch packman strategy headed?” May 13-10), the New Brunswick vote may well be a sign of a mood shift: controlling our resources is important at the ballot box.

If we care about MDA’s ownership (it is still a widely-held public company today) and our Nation’s ability to work with NASA on a Mars Rover, food production must rank right up there.

Is it possible that Canadian voters will say enough is a enough, should a federal election get called this fall? Could Potash, and everything that a sale of a part of our inheritance stands for, wind up to be The Issue? Will the federal Liberals learn from their Provincial cousins, and champion Premier Wall’s poignant view?

It seems so obvious to me.

MRM
(you can find the Seeking Alpha article here)

 
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