THE DISTILLERY: Barracking for BHP

It's Friday, the Grand Final for those AFL-inclined is tomorrow. Then we get our lives back. Spring has sprung, even in Melbourne, time to look positive and smile at the world. Well, not for some. In New Zealand they're puzzling over a slide in growth in the second quarter that wasn't supposed to happen, while in Ireland they are worried that a plunge back into the red in the second quarter (that wasn't supposed to happen) will mean more problems for the country, its banks and the eurozone where growth forecasts (especially in Germany) are being wound back. Markets are fearful about what the Fed and other central banks might do as they confront this growth slide; spending more money they don't have is the big tip. That will be bad for the US dollar, good for gold, commodities, and the Australian dollar (parity here we come) and Australian companies wanting to grow offshore, like BHP Potash, sorry, Billiton. That's if it can get through the front door in Canada, The Canucks are mighty unhappy about this bid, as Potash's legal action shows. It brought chortles and sneers from Aussie jotters this morning.

Take this offering from The Australian's Bryan Frith: "It smacks of a tactical measure designed to secure more breathing space in which to continue Potash's attempts to find a counter bidder or white knight, and perhaps to disguise the apparent lack of success to date. In Australia one of the primary reasons for establishing the Takeovers Panel was to prevent bidders and target companies from tying up the courts with litigation which was initiated for tactical purposes. The suspicion that the Potash proceedings are tactical is strengthened by the impression of forum shopping. The action has not been brought in Canada, the company's home base, but in the more litigious US jurisdiction, where outlandish lawsuits are more common." And the Chicago location for the action is where Potash CEO, Bill Doyle lives, handy that.

Fellow Australian, John Durie had written earlier: "The Potash Corp legal action aimed at frustrating the BHP bid is a delaying tactic, and in some respects it's good news for BHP. If Potash was confident that rival bidders were about to emerge, there would be no need to file actions complaining about the bid. BHP re-acted as you would expect, saying the Potash claims were without merit. For corporate lawyers in Australia, the move is a re-run of the 1980s delaying actions that prompted the introduction of the Takeovers Panel." And this morning Durie added: " In fact BHP's Marius Kloppers is on a roll because he knows he is probably the guy in town right now who can write a cheque for $US40 billion on his own."

Alan Kohler on Business Spectator: "The Potash Corp complaint against BHP Billiton filed with the US District Court in Chicago last night is pretty hilarious, but it is nothing more than a sideshow intended to buy Potash some time."

And Fairfax's Malcolm Maiden agrees: "They must be more polite in takeover battles on the other side of the big pond: the legal action that BHP Billiton's Canadian $US39 billion takeover target, Potash Corp, has filed in Chicago essentially accuses the company it calls an ''800 pound gorilla'' of doing what companies here have always done in takeovers: talk up their own prospects, and talk down the target's. The case itself (assuming it is taken up by the court) and the information demands it generates will take time, and time is something Potash Corp can use."

Elsewhere, September 30 falls next Thursday and its when three of the Big Four banks rule off their 2010 full year accounts. The Australian Financial Review points out that "Investors with the bulk of their portfolio in the big four banks are in danger of poor returns, experts warn, as higher capital requirements, slower lending growth and incoming liquidity rules constrain earnings."

Fairfax's Insider, David Symons says we will soon find out if the ANZ, the only local bank with a strategy, is still on track: "Just on three years since ANZ chief Mike Smith set down a five-year target of generating 20 per cent of earnings from Asian businesses, investors hungry for an update will shortly know if there are plans to lift the bar. On November 26, ANZ will hold its first major group strategy update since Smith laid out his super-regional plan. The update will outline a fresh blueprint for the future, which is timely as the banking sector has changed substantially since Smith started in the role in 2007. The timing of the update is important as investors will know by that stage if ANZ is moving ahead with the acquisition of a 57 per cent stake that's up for grabs in Korea Exchange Bank." The other club members are just crouching in the Australian market, wondering what to do next.

And the AFR's Chanticleer says Westpac CEO, the sainted Gail Kelly has a plan: "Two years after spending $12 billion buying St George Bank, the chief executive of Westpac Banking Corp, Gail Kelly, is finally moving to maximise the financial benefits of the merger by attacking the subsidiary's $1 billion a year in expenses." Will the St George brand and identity survive. Westpac attacked costs at the Bank of Melbourne and Challenge Bank in Perth years ago after taking them over. Both are no longer with us and the clients departed.

And finally, with the weekend ahead (and that football game dominating), some readers may like to take in a movie. For those masochistic enough to want to watch the sequel to Wall Street, Fairfax's Stuart Washington has given up his day job to become a one-off reviewer. He's not a fan: "THE collapse of Wall Street in 2008 deserves a truly big movie. After all, the world was being brought to its knees by a coming together of greed and huge egos. A big movie would capture the hubris and the overreaching - followed by swift descents into the abyss - in a drama of Shakespearean proportions. Wall Street: Money Never Sleeps is not that movie. But for the finance-minded it will have to do for now. And along the way, it offers some cheap thrills." It's made by Oliver Stone so "cheap thrills" is spot on.