(BHP-Potash story updated with further detail from HSBC's research note.)

NEW YORK (

TheStreet

) --

BHP Billiton's

(BHP) - Get Report

hostile pursuit of

Potash

(POT)

isn't a good idea -- at least according to one contrarian equities analyst, who downgraded shares of the Australio-Anglo mining giant Friday.

Andrew Keen, the metals equities analyst at

HSBC

(HBC)

in London cut his rating on BHP stock to neutral from buy based largely on his belief that the miner doesn't stand to gain anything from its aggressive

move to acquire Potash

, especially if, as the market believes, BHP must hike its bid to $150 a share or more from the current offer on the table, $130 a share, or nearly $40 billion.

>>Potash vs. BHP: The Fertilizer War From A to Z

"The market needs to ask where value is created in this transaction and, given the premium likely to be paid, to whom it accrues," Keen wrote in a 24-page analysis of BHP's bid, released on Friday. "Value

could

be created, but the evidence remains unconvincing."

Essentially Keen's argument was this: BHP doesn't need any additional diversity in its asset portfolio, and Potash won't contribute enough to the larger company to justify the premium BHP will likely need to pay in order to do a deal.

According to his calculations, which "are not overly different to consensus," an acquisition of Potash at $130 a share would bump BHP's earnings in 2011 by just 0.3%. But if the BHP were to pay $150 to $160 a share, the combined company would "see the limits of accretion in 2012."

The synergies also would be nill, the analyst said, a view the market evidently agrees with. Since

BHP's intentions came to light in mid August

, the $10 billion premium "expected to be offered to Potash shareholders was immediately taken off BHP's market capitalisation," Keen wrote.

Also since the affair began, Potash has been resolute that other white-knight parties really do have a genuine interest in making some kind of counteroffer for the company.

The latest speculation, courtesy of Canada's

Globe & Mail

newspaper, is that Potash is attempting to cobble together a diverse alliance of players, from sovereign wealth funds to Chinese state-controlled industries to Canadian pension funds, that would conduct a leveraged buyout of Potash.

Investors expect either another bidder to emerge, or for BHP to increase its offer price on its own even without a rival, a tack that it has taken in the past. When the company was trying to combine with

Rio Tinto

(RTP)

in 2007-08, BHP's braintrust waited three months before hiking its offer by 13%. (The deal ultimately unraveled spectacularly amid the financial crisis.)

If and when BHP lifts its bid for Potash, the company may need to be careful. That's because any offer price worth more than 25% of BHP's market value, which now stands at about $175 billion, may elicit a BHP shareholder vote, Keen noted -- "not necessarily a barrier, but an added complication."

BHP's New York-listed shares were trading at $72.56, down 1% in early morning trading Friday. Potash, meanwhile, was falling 0.3% to $147.99.

-- Written by Scott Eden in New York

>>Potash Talks Rebound, Pricing but Not BHP

>>Rio Tinto Eyes Russian Potash

>>Potash CEO: BHP Won't Be Only Bidder

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