Canada rejects BHP's takeover bid for Potash

Government blocks global mining company's £23.7bn bid on the basis that it would not provide a "net

The Canadian government has blocked global miner BHP Billiton's $38.6bn (£23.7bn) bid for Potash Corporation of Saskatchewan.

Canada Industry Minister Tony Clement, who reviewed BHP's bid, said the deal would not benefit the country.

In a statement released after the decision, BHP said it was "disappointed" but believed that the deal would benefit Canada.

However, shares in the mining giant rose to their highest level in almost seven months, as BHP investors were now expecting the Anglo-Australian miner to return capital through a share buyback or expand its interests in oil and gas in an effort to put its growing cash pile to work.
"I have come to the conclusion that BHP Billiton does not present a likely net benefit to Canada," Clement said.
BHP now has 30 days to try to convince Canada to reverse the decision through "additional undertakings," Clement said.

Ottawa laws require government officials to review takeovers by foreign companies to make sure that Canada could make a net benefit from any deal.