Market Likes BHP (NYSE:BP) Better without Potash (NYSE:POT) Deal Hanging Over it

After the Canadian government refused to allow the bid for Potash (NYSE:POT) by BHP (NYSE:BHP) to go forward (although they have 30 days to persuade them differently), the market responded positively to the news, and BHP spiked in share price without the fertilizer company appearing to be around its neck any longer.

It wasn't only the probably end of the deal which spurred the share price of BHP upward, but the idea they would have had to make a significantly higher bid in order to land the company was the major impetus behind the share price move.

Even with the 30-day period, it's doubtful BHP will have anything new to offer to persuade the protectionist Canadians, as they've pretty much stated their case effectively and clearly already.

This is really nothing more than Canadian politics and securing political favor from people in Saskatchewan, who are hailing some politicians opposing the deal as heroes, even though Canada has taken something of a black eye internationally from their irrational opposition to the deal.

Although BHP needs big deals to increase growth because of their size, there are a lot of companies out there which could help them, especially if they picked up more than one along the way.

The problem is many raw material companies have soared in value because of rising commodity prices, and that makes any deal likely to force BHP to pay a hefty premium.

It looks like they may be better off focusing on organic growth rather than growth through acquisition at this time.