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Having failed last year to buy rival mining giant Rio Tinto, it now looks as if BHP Billiton is lining up another major acquisition.
The world's biggest mining outfit, quoted in London and Sydney, is this time expected to turn its firepower on Canada's Potash Corp. Based in Saskatoon, Saskatchewan, the company is the world's biggest potash producer and the second-largest producer of nitrogen and third-biggest producer of phosphate, all of which go towards making fertiliser.
At the last count, it carried a price tag of £18.3 billion. BHP directors were talking to brokers in the City this week. They expressed their regret at not being in the potash business, which they likened to the iron-ore industry.
Potash shares rose almost 7% in Toronto, sparking talk that a bid from BHP, down 14p at 1445p, may be on the way. But brokers say BHP would have to offer a generous premium to guarantee success. It recently added to the speculation by raising €2.25 billion (£2.1 billion) through a bond issue.
The miner made an offer of 6000p a share for Rio Tinto in 2007. A deal would have created a mining giant worth more than £120 billion, but the terms were rejected. Rio was down 39p at 2343p.
Shares generally were a touch firmer as investors looked to consolidate some of this week's gains ahead of next week's G20 meeting in London. Turn-over slowed to a trickle as the FTSE 100 index posted a rise of 11.94 to 3937.14.
Citigroup takes a cautious view of the recent rally, saying: "15% is an average bear market rally. This rally is now average. Performance by the best and worst sectors is also in line with history".
The early focus was again on the banking sector. Barclays extended yesterday's gains with a jump of 15.1p at 155.2p despite contradictory reports from the Financial Times. The Pink 'Un hedged its bets with a first-edition headline that read "Fears rise Barclays will need injection", which was replaced in later editions by "Barclays' stress test signals no new funds". Confused? You should be. No FT, no comment? Quite!
One man who will be pleased by the performance of Barclays' shares is the banking analyst of the company's own broker Credit Suisse. Jonathan Pierce yesterday jacked up his target price for the High Street lender from 100p to 170p with an outperform rating. The shares have already come up from 81.8p since the start of the month. Brokers including Morgan Stanley and Panmure Gordon have recently slashed their targets and warned of future losses.
Barclays' performance breathed new life into state-owned banks Lloyds Banking Group, up 7p at 76p, and Royal Bank of Scotland, 0.7p better at 27.3p.
On AIM, shares of Norwood Immunology were suspended at 1¼p pending publication of the biotechnology specialist's interim results.
New York extended this week's strong run, with the S&P 500 index on course to enjoy its best monthly performance since 1974. Growing optimism the US economy may be close to bottoming out underpinned sentiment. The Dow closed up 174.75 points at 7924.56.
The tech-heavy Nasdaq market is also showing a gain for the first time this year. Apple and Hewlett-Packard led the way higher. But the banks reacted badly to news of tough new rules on the way they operate. Bank of America shed almost 2% to $7.58, Citigroup 5% to $2.81 and Wells Fargo 3% to $15.95.
Tokyo shares were little changed, with exporters climbing on growing optimism about a recovery in the US economy while other stocks succumbed to profit-taking after recent rallies. The Nikkei 225 Average ended down 9.36 points at 8626.97.
In Hong Kong, retailer Esprit dived after the surprise departure of a key executive, but the overall market gained as investors bought into laggards in this week's rally. Shares in Esprit fell 9.3% to HK$43.40 after director Thomas Grote resigned. The Hang Seng index finished up 10.52 points at 14,119.5.
