CANADA STOCKS-TSX rallies after Potash rejects BHP bid

*TSX up 73.82 points, or 0.64 percent, to 11,626.58

*Potash Corp soars 23.5 pct after it rejects BHP bid

*Magna jumps after court OKs payout to Magna chairman
(Updates to midmorning, adds quote)

By Jennifer Kwan

TORONTO, Aug 17 (BestGrowthStock) – Toronto’s main stock index rose
on Tuesday morning after Potash Corp of Saskatchewan (POT.TO: )
rejected an unsolicited $38.6 billion bid for the company,
raising the prospect of a higher bid and other takeover
activity in the fertilizer sector.

Potash Corp, the world’s biggest fertilizer company, said
its board rejected BHP Billiton’s offer as “grossly inadequate”
and its shares shot up 23.5 percent to C$144.74.
[ID:nSGE67G0DT].

Fellow fertilizer producer Agrium (AGU.TO: ) rose 3.9 percent
to C$71.49, helping to boost the index’s materials sector by
3.3 percent.

“Generally speaking, in this sort of situation, where
there’s smoke there’s fire,” said Bob Gorman, chief portfolio
strategist at TD Waterhouse.

“You could have a higher bid come out of BHP or you
could have other players enter here with a view to making bids
themselves. Or the third possibility is that this sort of
activity naturally puts the spotlight on the sector involved.”

Gorman said that investor focus could also spark other
merger and acquisition activity.

At 10:20 a.m. (1420 GMT), the Toronto Stock Exchange’s
S&P/TSX composite index (.GSPTSE: ) was up 73.82 points, or 0.64
percent, at 11,626.58.

Six of the TSX’s 10 main sectors were higher, with the
energy group also supporting the resource-heavy index as oil
rose above $76 a barrel. Oil snapped a five-day losing streak
to rebound as firmer equity markets and a weaker dollar
outweighed concerns about the pace of global economic
recovery.[O/R]. Oil company Canadian Natural Resources (CNQ.TO: )
climbed 1.8 percent to C$34.51.

Shares of Magna International (MGa.TO: ) climbed 3.8 percent
to C$82.64 after a court approved on Tuesday a plan by Magna to
pay founder Frank Stronach close to a billion dollars in
exchange for giving up control of the auto parts giant.
[ID:nN17267794]

“It removes uncertainty surrounding the future
of Magna shares. Ultimately, investors value simplicity and
clarity,” Gorman said.

($1=$1.03 Canadian)
(Reporting by Jennifer Kwan; editing by Peter Galloway)

CANADA STOCKS-TSX rallies after Potash rejects BHP bid