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BHP Billiton shares surge on hopes of buyback

World's largest mining company's share prices rise 6.6 per cent in a day.

BHP Billiton rallied 6.6 per cent to a record price in London yesterday after Canada blocked the world's largest mining company's $39bn hostile takeover bid for Potash Corporation. Its shares advanced 150p to £24.30 in London.

Canada, on Wednesday evening, announced that it would not allow BHP Billiton to proceed with its $40bn (£24.6bn) deal for fertiliser group PotashCorp.

The prospect of a $25bn cash return to shareholders via a share buyback or special dividend propelled BHP shares higher on Thursday to the all time high of £24.30.

In the event of BHP's PotashCorp bid falling through, the company would have more than $16bn cash by the end of next year, making a $10bn buyback possible.

BHP has 30 days to appeal but shareholders did not expect the deal to make any further headway.

The failure of BHP's PotashCorp bid will be the third unsuccessful deal by the company in the past three years.