Weeks after the meltdown of its iron ore partnership deal with Rio Tinto Ltd, BHP Billiton suffered another blow on Thursday when the Canadian government affirmed the earlier dumping of the mining giant's $40 billion takeover proposal for Potash Corporation by the provincial government of Saskatchewan.

Yet hours after news of the collapsed deal broke, BHP Billiton saw its shares surging to a seven-month high due largely to strong speculations that a share buyback is in the offing, with investors also appearing relieved that the prospect of overspending for a fertiliser firm was finally over and done with.

This despite the 30 days given by the federal government of Canada for BHP to re-convince them to decide otherwise as analysts surmised that the likelihood of an appeal from the mining firm would be remote considering the huge task ahead of it.

Most analysts believed that the rejection, only the second dispensed by the Canadian government in 25 years, could serve as a relief for BHP Billiton which saw its shares beaten down by up to 10 percent by its closest rival, Rio Tinto, since it decided to launch its hostile takeover for Potash Corporation in August.

The bid may still be technically breathing but experts agreed that BHP Billiton may just have to allow the one-month consolation period to simply lapse and move on to more pressing concerns, if only to finally set aside a major setback especially for company chief executive Marius Kloppers.

The Canadian government argued that BHP Billiton's proposal to buy out Potash Corporation would not result to net benefit for the host country and much so to the province of Saskatchewan and analysts maintained that the decision would stick no matter what.

The mining giant admitted that the rejection came as a surprise and a disappointment though it remained convinced that the deal would serve the interests of both the Canadian federal government and more so the people of Saskatchewan due to the benefits that the agreement would spawn.

Canadian Industry Minister Tony Clement was tasked to hand down the final decision of his government and he shared that the move was backed by a thorough assessment of the merits and demerits of the proposed merger yet in the end, the deal had to be rebuffed.

That sweeping claim of no net benefit for Canada had to do for now as the reason for the rejection of BHP Billiton's proposal as Mr Clement himself admitted that the specifics of the Canadian decision could not be revealed at least until the 30 days given to BHP for further submissions have expired.

Foreign investment experts in Canada are in doubt though if BHP Billiton has anything more to offer that could prod for a reversal of the turn down, arguing that the mining firm should have maximised its proposal to begin with in order to win the nod of the Canadian authorities.