The board of Potash Corporation of Saskatchewan officially rejected a hostile $38.6-billion US takeover bid from Australian miner BHP Billiton Monday, and urged its shareholders to do the same.

PotashCorp says it is in talks with a number of other parties. (Canadian Press)

The company also said it expected other offers to emerge and that it has "initiated contact with a number of third parties who have expressed an interest in considering alternative transactions."

PotashCorp president and CEO Bill Doyle said in an interview that he believes the company is worth "billions" more than BHP's offer, noting a number of other companies are kicking the tires.

"There's a large universe of companies that are interested in us," he said, adding that some weren't necessarily fertilizer companies.

"This is not a short process. A lot of them are crunching numbers and doing their internal work."

Among the companies considered possible suitors for PotashCorp are: Vale SA, which swallowed up Canadian metals miner Inco Ltd. a few years ago; Sinochem; Canada's Teck Resources; and London-based Rio Tinto, which acquired Alcan Inc. of Montreal in 2007.

PotashCorp has been contacted by China's Sinochem Group and Brazil's Vale, Bloomberg reported Monday citing said a person with knowledge of the matter.

Formal rejection

PotashCorp's board said in a statement earlier on Monday that it voted to unanimously reject the unsolicited offer, calling it "wholly inadequate" and saying it "is not in the best interests of the company."

After the $130-per-share bid was initially rejected by PotashCorp on Aug. 17, BHP Billiton said it would take the bid directly to the shareholders of the Saskatchewan company.

Doyle said in the statement that the board is unanimous in its belief that the offer substantially undervalues PotashCorp.

He said it "fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects."

Shares of PotashCorp have traded above the current offer price since BHP made its offer, which suggests investors believe the company will sell for more than the current bid price.

PotashCorp was up $1.89, or 1.3 per cent, at $151.56 in New York at midday.

'Opportunistic' offer

PotashCorp has said the board believes the timing of the offer is "highly opportunistic" and represents an "ill-disguised attempt to exploit an anomaly in the equity market valuation of PotashCorp and that BHP Billiton is opportunistically attempting to transfer the upside value in PotashCorp to its own shareholders at the expense of PotashCorp shareholders."

The company has refused to speculate on what its shares are really worth and BHP Billiton has said it won't comment on what it would be willing to pay if a rival steps up, noting that it currently has the only offer on the table.

Potash Corporation of Saskatchewan is the world's largest fertilizer enterprise.

BHP Billiton has been expanding its presence in Saskatchewan's potash hub, buying up several smaller names in the business, including Athabasca Potash Inc. earlier this year.

The company, with a market capitalization of about $200 billion US, is a diversified global enterprise with headquarters in Melbourne, Australia.