By Jennifer Kwan

TORONTO (Reuters) - Toronto's main stock index
ended higher Wednesday as investors hoped for a higher bid
for takeover target Potash Corp, while gold miners
also rose.

Investors continued to fixate on developments in BHP
Billiton's campaign to take over Potash Corp
. BHP said it would take its $39-billion, $130-a-share
bid directly to shareholders, bypassing Potash Corp's board,
which a day earlier called the bid "grossly inadequate".

Potash Corp shares gained 3 percent to C$151.75, helping
the materials sector climb 1.9 percent. On Tuesday, Potash
soared 26 percent.

"They're betting on either BHP raising their offer or
another competitor coming in and competing for Potash," Aaron
Fennell, senior market strategist at Lind-Waldock Canada, said
of investor reaction.

Still, it's difficult to know how events will unfold, said
Paul Taylor, chief investment officer at BMO Harris Investment
Management Inc.

"The price is clearly not where it needs to be, it's not
obvious who would be the other bidders. It comes back to BHP
and whether this is just a stink-ball bid just to test the
waters or whether they're serious about things and come back
with an enhanced offer," Taylor said.

The Toronto Stock Exchange's S&P/TSX composite index
closed 52.44 points, or 0.45 percent, higher at
11,781.08, with eight of its 10 main groups higher.

Gold stocks helped boost the resource-heavy index, with
Barrick Gold up 1.4 percent at C$46.50, while Goldcorp
rose 3.9 percent to C$43.92. Agnico-Eagle
advanced 1.3 percent to C$64.89.

The price of gold rose to a 1-1/2 month high after being
lower early in the day, extending its rally to a fifth session
on strong physical demand and technical buying.

Magna International climbed 1.6 percent to C$84.93 after a
Canadian court Tuesday approved a plan by Magna to pay
founder Frank Stronach close to a billion dollars in exchange
for giving up control of the auto parts giant he started.

However, dissident Magna shareholders, including two of
Canada's largest pension funds, will appeal a court ruling.

Canada's CoolBrands International Inc agreed to
acquire privately held hygiene products and services company
Swisher International Inc in an all-stock deal valued at
C$102.9 million.

CoolBrand finished up 3.9 percent at C$1.85

On the downside were energy issues, which fell as oil
prices settled lower at $75.42 a barrel. Suncor Energy
dropped 0.6 percent to C$33.29, while Canadian Natural
Resources fell 1.2 percent to C$34.31.

The blue chip S&P/TSX 60 index closed 3.04 points
higher, or 0.44 percent, at 686.68.

($1=$1.03 Canadian)
(Reporting by Jennifer Kwan; editing by Peter Galloway)