PotashCorp has rejected as "grossly inadequate" and "highly opportunistic" a .6bn, all-cash offer by BHP Billiton, the latest step of the consolidation sweeping the fertilizer industry.

Canada-based PotashCorp, the world's biggest potash producer, said its board had unanimously rejected BHP's bid, which was revealed at a meeting of the group's chief executives on Friday.

The offer, equivalent to a share, represented an "aggressive" attempt to buy PotashCorp "for significantly less than its intrinsic value", Dallas Howe, the company's chairman, said, adding at the company was as an independent poised to "deliver compelling value" to investors.

"The company firmly believes it is on the verge of an inflection point, where potash demand will return to historical trend-line growth, supply will tighten, and pricing will improve," the group said.

Bill Doyle, the PotashCorp chief executive, added: "I am not saying that we are opposed to a sale, but what I am saying is we are opposed to a steal of the company."

BHP, which two years ago failed in a megabid for Rio Tinto, said following PotashCorp's rebuff that it was continuing to review its options. BHP shares closed 2.4% lower at 1,916p in London.

PotashCorp shares jumped 27% to 2.32 in New York, as of 17:30 GMT, implying that investors expect a higher bid. 

Deal wave 

The approach come amid an acceleration in deals involving fertilizer groups, even in the potash sector which is, unlike the nitrogen segment, already focused by the rarity of deposits, which are found notably in North America and the former Soviet Union.

On Monday, Agrium, the Canadian potash group, unveiled a .1bn bid for Australian grain handler AWB, while investors seen friendly to Suleiman Kerimov, the controlling shareholder at Uralkali, bought stakes in domestic rival Silvinit in deal seen as heralding the merger of the Russian heavyweights.

PotashCorp was reported on Friday by Russian press to be interested in a 10-15% stake in Uralkali.

Many of the deals have consolidated existing players, such as the takeover earlier this year of US nitrogen group Terra Industries by rival CF Industries.

However, phosphate and potash, as mined commodities, have also attracted the attention of metals groups such as Rio, BHP's arch-rival which was also said to be interested in a Uralkali stake, and Vale, which has bought foreign fertilizer groups such as Mosaic and Yara out of assets in its native Brazil.

'Attractive premium'

BHP itself, while developing its own Jansen potash operation in Canada, but has long been rumoured to harbour a desire to buy PotashCorp, speculation which peaked when it raised bn from debt markets last year.

Marius Klopper, the BHP chairman said, in a letter written on Saturday, but not released until Tuesday, that the group's bid offered an "attractive premium" of 32%, compared with PotashCorp stock's average closing price over the last month.

It also offered "substantial benefits to other stakeholders", with BHP prepared to keep its potash headquarters in Canada after a deal.

Analysts at Evolution said that the deal would "bring forwards the creation of a [potash] income stream for [BHP] from, perhaps, 2015 to the 2011 financial year".