Shares of Potash (POT) advanced sharply after the fertilizer producer rejected a $38.6 billion takeover offer from mining giant BHP Billiton (BHP). The bid, valued at $130 per POT share, would have been the largest acquisition of 2010, so far. But it was not to be, at least not yet, as Potash's board of directors rejected the offer.

Despite the fact that the offer represented a 16% premium over the stock's closing price the day before thereafter, the board declared the proposal inadequate. Indeed, the fertilizer producer argued the bid failed to account for the company's leading position in a key industry, as well as its dynamic growth prospects. Management also declared that the industry was well on its way to a recovery.

These comments, coupled with BHP Billiton's long-rumored intent to expand into the fertilizer business, seem to have fueled investor optimism toward Potash and, to a lesser extent, the fertilizer segment in general. Indeed, Potash’s stock price soared after the company turned down BHP’s offer, while shares of companies such as Mosaic Company (MOS) and CF Industries (CF) were also rallying on the news.

Elsewhere, there were some proposals that were welcomed with open arms. For one, packaging giant Pactiv (PTV) entered into a merger agreement with Reynolds Group Holdings, a global manufacturer of consumer packaging and storage products. As part of the agreement, Pactiv stockholders would receive $33.25 in cash for each share of PTV owned, a 39% premium to the closing share price on May 14th, when rumors of a potential takeover were first published.

Part of the driving force behind the large premium was the competitive bidding process that ensued after Apollo Global Management, a private equity outfit, initially announced its interest. Shortly thereafter, Georgia Pacific threw its hat in the ring, as well.

Pactiv's primary appeal stems from its core Hefty brand and excellent worldwide distribution network, which ought to help Reynolds expand into new markets, while consolidating its distribution network.

At the same time, orthopedic products manufacturer Osteotech (OSTE) agreed to be acquired by medical device giant Medtronic (MDT) for about $120 million. Under terms of the deal, stockholders would receive $6.50 in cash per OSTE shares held, representing a 66% premium over the issue's preannouncement price.

Osteotech has been in the midst of an ongoing proxy battle with a contingent holding a nearly one-quarter stake in the company. This even included an earlier issue of a ``poison pill'' provision, while Osteotech's financial condition worsened, and it seemed on track to record a share deficit in 2010. Thus, the current board was quick to unanimously accept the offer.

Medtronic, for its part, would look to integrate this business into its Biologic's bone-healing platform, expanding its products and services into areas such as joint reconstruction and sports medicine.

Both the Pactiv and Osteotech acquisitions still require standard regulatory and shareholder approvals. The lofty premiums should help allay some stockholder concerns. As for Potash, it will now likely remain in investors’ spotlights for the time being.