TORONTO - As analysts debate how much PotashCorp is really worth now that it's fending off a hostile takeover bid, Industry Minister Tony Clement said Wednesday that the federal government will stay on the sidelines and let the bidding process unfold.

Any foreign takeover of a large Canadian company must be of net benefit to the country, but Clement said his officials won't even begin a review unless either the board or shareholders of PotashCorp accept a takeover offer.

"I'm not prepared to speculate on anything," Clement told reporters in Calgary. "It's really at the beginning stages of what is obviously an unfolding story."

Australian mining giant BHP Billiton (NYSE:BHP) said Wednesday it will take its US$38.6-billion cash offer for PotashCorp directly to shareholders of the Saskatchewan-based company.

The move comes a day after the fertilizer giant's chief executive, William Doyle, characterized BHP Billiton's hostile bid as "aggressive" and "beyond opportunistic" and suggested the offer of US$130 per share would be a steal.

In a statement on the BHP Billiton website Wednesday, chairman Jac Nasser said the company believes PotashCorp (TSX:POT) shareholders will like the BHP offer.

"We firmly believe that PotashCorp shareholders will find the certainty of a cash offer, at a premium of 32 per cent...very attractive."

But the premium referred to PotashCorp's stock price before BHP's offer was made public. Since then, the Canadian company's shares risen well above the bid price, eliminating the premium, on the expectation that a higher bid will emerge.

Some analysts suggested PotashCorp could fetch US$170 per share, but that would depend on whether a rival offer comes forward. The list of potential buyers is relatively short.

Luciano Orengo, a portfolio manager at MFC Global Investment Management, said both Anglo-Australian mining company Rio Tinto PLC and Brazil's Vale SA (NYSE:VALE) are potential bidders.

But Vale, which bought Canadian nickel mining giant Inco in a hostile takeover, doesn't have BHP's financial strength and Rio Tinto, which acquired Canadian aluminum giant Alcan in a friendly deal, has been getting out of potash, he said.

Orengo said he thought US$170 a share might be the most anybody would be willing to pay but that US$150 would be the low end of what a buyer will have to pay since shareholders won't want to part with their PotashCorp stock for too little.

The company's stock closed Wednesday at C$151.75 in Toronto and US$147.93 in New York, giving it a market value of about US$43.9 billion — roughly US$5 billion more than BHP has offered to date.

"BHP has US$11 billion in cash and they can easily tap the debt market to get the rest," Orengo said.

PotashCorp 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.

BHP Billiton also said Wednesday that it plans to maintain current job levels at PotashCorp’s Saskatchewan and New Brunswick operations "for the foreseeable future."

Marius Kloppers, BHP's chief executive officer, told analysts Wednesday that PotashCorp would be operated in a manner that's consistent with the company's overall philosophy.

"Our basic philosophy is to run our assets at full capacity and take the market prices, which effectively means that we maintain full employment throughout the cycle. Also, continuing our investment programs throughout the cycle."

BHP deploys between $10 billion and $15 billion a year on new capital projects in its various businesses, including about $1 billion that has been spent so far on the Jansen startup potash project in Saskatchewan.

"We hope that it will become evident that testing that project with a view to getting it to market is an important part of our strategy," Kloppers said.

"Rather than look at this (bid) as a change in strategy, you should look at the acquisition of PotashCorp as an attractive opportunity for us, also for the PCS shareholders, that is in addition to the activities that we've been conducting to date."

As for whether BHP Billiton may offer more for PotashCorp, Kloppers noted that BHP has the only offer on the table and suggested it would be a tough one to beat.

"It is a large transaction and, particularly, I do point at the fact that it's all cash in our case. With markets being volatile, that is a different value proposition to somebody that may offer some other mix of consideration."

Kloppers didn't elaborate on what he meant by "some other mix of consideration," but theoretically a rival might offer to pay in shares, with promises that investors can benefit from the potential growth of the post-deal company, or some form of debt that provides interest payments or a combination of cash, debt and stock.

"Importantly, apart from just the shareholders, we are long-standing good citizens in Canada with a long track record of excellent achievement in things like aboriginal employment, communities, environment and the way we do things," Kloppers said.

Among BHP's holdings is the Ekati diamond mine, 300 kilometres northeast of Yellowknife. It also bought Athabasca Potash Inc. earlier this year.

BHP said a submission to Investment Canada would include an intention to base the president and management of the Canadian potash operations in Saskatchewan.

The company also intends to propose a Canadian nominee to sit on the BHP Billiton board.

The Saskatchewan government said Tuesday that any company that might be interested in taking over PotashCorp will have to keep its home in the province. Provincial legislation dictates that PotashCorp maintain its head office in Saskatchewan and Energy and Resources Minister Bill Boyd said there is no plan to repeal the law.

NDP industry critic Claude Gravelle, who represents an Ontario riding with extensive mining activity, said the Conservative government should conduct a comprehensive public review of any foreign takeover of PotashCorp.

“As with any foreign investment agreement, the BHP proposal has the potential to strengthen the economy and create jobs, but it must be subject to a fully public review,” Gravelle said in a statement.

“Public scrutiny is needed because the Conservatives have proven that they simply cannot be trusted to negotiate with these multinationals.”

Clement, for his part, said any takeover of a certain size must be scrutinized to determine of it's of net benefit to Canada and whether there are national security implications.

"There's still lots of ground to cover before we get to reviewing a potential bid."