Allana Potash Held Talks With CCCL Before ICL Deal

The Financial Post reported that China’s Communications Construction Company Ltd. was in talks with Allana Potash Corp (TSX:AAA) to buy a controlling stake in the company prior to signing the deal with ICL (NYSE:ICL).

As quoted in the market news:

The Financial Post received a copy of a memorandum of understanding (MOU) between Allana and state-owned China Communications Construction Company Ltd. (CCCC). The document, dated March 4, contemplated a deal in which CCCC would acquire a 51 per cent interest in Toronto-based Allana for $156 million. CCCC would then take charge of financing and construction responsibilities on Allana’s US$700 million Danakhil potash project in Ethiopia.

Ultimately, the two sides did not move beyond this framework agreement to reach a firm deal. On March 26, Allana agreed to a takeover offer from Israel Chemicals Ltd. (ICL) worth $137 million.

Sources close to Allana said the firm tried to negotiate a binding agreement, but the Chinese company dragged its feet. Chinese firms are known to be careful and deliberate negotiators, and they frequently sign MOUs that don’t result in firm deals.

Click here to read the full Financial Post report.