An Australian mining giant said Wednesday it will take its US$38.6-billion cash offer for Saskatchewan-based PotashCorp directly to shareholders after the fertilizer company rejected the hostile takeover bid as tantamount to "stealing the company."

BHP Billiton said in a statement on its website that it believes the offer will appeal to PotashCorp shareholders.

"We firmly believe that PotashCorp shareholders will find the certainty of a cash offer, at a premium of 32 per cent ... very attractive," company chairman Jac Nasser said in the statement.

PotashCorp, formally known as the Potash Corporation of Saskatchewan, denounced the BHP bid Tuesday as far too low to even form the basis for serious negotiations.

"Our board determined that the price that we were offered was completely inadequate and undervalued the company very severely," PotashCorp president and chief executive Officer Bill Doyle told The Canadian Press Tuesday.

"We just think it totally missed the boat and we wouldn't speculate on a price that would be acceptable."

The offer of US$130 per share from BHP -- the world's biggest mining company -- was 16 per cent above Monday's price for PotashCorp stock on the Toronto Stock Exchange but news of the offer sent share prices leaping more than 25 per cent to C$147.34.

BNN's Michael Kane said the industry consensus is that the bid was too low and that the soaring price of PotashCorp stock means traders expect a bidding war to erupt over the company.

"Potash Corp's stock price shot up more than 25 per cent and added more than $10-billion to the company's market value," he told CTV News Channel. "The stock rose to $147.34 in New York and that suggests that investors expect another bid from either BHP or another company."

Kane said the stock price may rise as high as $165 per share, if other potential corporate suitors enter the bidding.

"That would take the value of the deal to just under $49 billion US. That would make it the largest takeover in this country's history."

But Marius Kloppers, BHP chief executive officer, told analysts Wednesday that his company has the only offer on the table and suggested it would be a tough one to beat.

"It is a large transaction and, particularly, I do point at the fact that it's all cash in our case. With markets being volatile, that is a different value proposition to somebody that may offer some other mix of consideration."

Kloppers didn't elaborate on what he meant by "some other mix of consideration" but a rival might offer to pay in shares or some form of debt that provides interest payments or a combination of cash, debt and stock.

"We are long-standing good citizens in Canada with a long track record of excellent achievement in things like aboriginal employment, communities, environment and the way we do things," Kloppers added.

Among BHP's holdings is the Ekati diamond mine, 310 kilometres northeast of Yellowknife. It also bought Athabasca Potash Inc. earlier this year.

Doyle said the BHP bid doesn't come even close to the true, long-term value of PotashCorp's assets but added the company would not shy away from a deal if the price was right.

"We're not opposed to a sale, but we don't want anyone stealing the company."

PotashCorp is the world's largest producer of potash with about 20 per cent of the world's production capacity.

The company was created by the provincial government in 1975 and was privatized in 1989. Legislation dictates that PotashCorp shall maintain its head office in Saskatchewan.

Despite its Saskatchewan roots, PotashCorp is already largely foreign owned. Nearly 40 per cent of the company's shareholders are based in the United States, with another 35 per cent or more held in various other countries.

In its bid, BHP said it is committed to being a "strong corporate citizen in Saskatchewan, New Brunswick and Canada."

It said its submission to Investment Canada would include an intention to base the president and management of the Canadian potash operations in Saskatchewan.

BHP Billiton also said Wednesday it plans to maintain current job levels at PotashCorp's Saskatchewan and New Brunswick operations "for the foreseeable future" and intends to propose a Canadian nominee to sit on the BHP Billiton Board.

Prime Minister Stephen Harper declined to comment on the deal, other than to point out that many major foreign acquisitions of Canadian companies are subject to federal review.

"Obviously, as I say, the takeover in question here at the moment has not yet happened, and when it does happen, as I say, officials will review it," Harper said in Toronto. "It would not be appropriate for me to comment on a commercial transaction that might be reviewed by government officials."

Here are some of the largest recent takeovers of Canadian companies:

• Aluminum producer Alcan Ltd., by Anglo-Australian miner Rio Tinto for US$38.1 billion
• Nickel miner Falconbridge Ltd., by Swiss-based Xstrata PLC for C$24.8 billion
• Petro-Canada, by Suncor Energy Inc. (TSX:SU) for C$19.2 billion
• Nickel producer Inco Ltd., by Brazil's CVRD (now known as Vale) for C$19 billion
• Placer Dome, by Barrick Gold (TSX:ABX) for US$10.3 billionGlamis Gold, by Goldcorp (TSX:G) for US$8.7 billion
• Shell Canada Ltd., by Royal Dutch Shell for C$8.7 billion
• Red Back Mining Inc. (TSX:RBI), by Kinross Gold Corp. (TSX:K) for US$7.1 billion
• Gas utility and pipeline company Terasen Inc., by Kinder Morgan for C$6.9 billion
• LionOre Mining International Ltd., by Norilsk Nickel for C$6.8 billion
• ATI Technologies Inc., by Advanced Micro Devices Inc. for US$6.2 billion
• Steelmaker Dofasco, by Arcelor for C$5.3 billion