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Shares of the San Francisco-based retailer were up 23 percent at $64.97 in morning trade Monday. Rival Children's Place Retail Stores Inc (PLCE.O) rose 5 percent to a year high, while Carter's Inc (CRI.N) rose 3 percent.

Under the deal, Gymboree shareholders will get $65.40 in cash for each share held, a premium of 23.5 percent to the stock's closing on Friday. The offer is at a 57 percent premium to the stock's price before reports on a possible sale of the company made the rounds on September 30.

On October 5, sources said the company had hired Goldman Sachs to begin a formal auction.

Gymboree, which runs retail stores and play centers, said it will solicit acquisition proposals from third parties for a period of 40 days.

Gymboree owns the Gymboree, Gymboree Outlet, Janie and Jack, and Crazy 8 brands. As of October 2, it operated a total of 1,037 retail stores, including in Canada, Puerto Rico and Australia.

Goldman Sachs is acting as financial advisor to the special committee of the board.

Under the terms of the deal, it is expected that affiliates of Bain Capital will start a tender offer for all of the outstanding shares of Gymboree shortly following the execution of the agreement.

Gymboree shares were trading close to the buyout offer at $64.99 in morning trade on Nasdaq. They touched a high of $65.18 in early trade.

(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Gopakumar Warrier)

Bernstein analyst Paul Galloway said getting the financial clout needed to improve on the terms of the biggest takeover bid this year required either aligning a diverse consortium or relying on the politically contentious backing of China.

The latest in weeks of speculation about ways BHP could be stymied saw reports that Canadian and Singaporean funds were talking about a possible deal, that China's preferred counterbidder was canvassing an Indian partner, and that Potash itself was examining a huge payout.

On the latter point, Galloway said Potash would find it challenging to demonstrate it can deliver more value by returning cash to shareholders.

Liberum Capital analysts said it was hard to see "a testosterone-filled bidding war" over Potash.

"With six weeks to go before the BHPB offer closes it is clear that the Chinese look unlikely to enter the fray and the schemes being tabled now are becoming increasingly political, complex and difficult to execute," they said in a note.

Still, Potash stock is more than 13 percent above BHP's $130 per share offer -- signaling investors anticipate a sweetened offer from BHP or a rival. BHP has set a November 18 bid deadline.

Potash has rejected BHP's bid as too cheap, and said it expected other investors to enter the fray.

Paul Cliff, head of European metals and mining research at Nomura, said the reports seemed to be "clutching at straws" and his base-case assumption remained a successful BHP takeover at a raised $150-$160.

ONTARIO

British newspaper The Sunday Times reported Canada's Ontario Teachers Pension Plan (OTPP) was talking to Singapore investment fund Temasek about launching an offer for Potash, possibly with Canadian miner Teck Resources.

The Sunday Times and rival The Sunday Telegraph also both said Potash was considering defensive moves, including a break-up. Both said Potash could sell its nitrogen and phosphate operations and return up to $70 per share to investors.

The Telegraph said Potash was talking to OTPP and others, which had received strong support from the Canada.

Teachers and Teck were not available to comment on Sunday, but both have said previously they would not be interested in bidding. Potash and Temasek declined to comment.

"Everybody is talking to everyone," said a person familiar with the situation, who did not deny that Temasek had been approached.

* But there were worries of a monetary tightening in China. The country has raised reserve requirements for six large commercial banks on a temporary basis, a move to drain cash from the economy but avoid over-tightening, four sources told Reuters on Monday.

* China's top offshore oil producer CNOOC Ltd (0883.HK) has agreed to pay $1.1 billion for a stake in a U.S. shale oil and gas field, testing the market for the first time since its 2005 failed bid for Unocal.

* Rival bidders may be looking to derail BHP Billiton's (BHP.AX) $39 billion bid for Canada's Potash Corp (POT.TO), with China's Sinochem and a Canadian pension fund among those working on plans, according to newspaper reports.

* Microsoft Corp (MSFT.O) is set to unveil a new line of phones running its Windows software on Monday, as it attempts to pull back market share from Apple Inc's (AAPL.O) iPhone and Google Inc's (GOOG.O) Android system in the fast-growing market for multi-featured 'smartphones'.

* The dollar fell to a 15-year low of 81.40 yen on Monday but later clawed higher and stabilized, with the chances of a short-term bounce growing, despite expectations the Federal Reserve will have to print money to support the economy.

* The dollar was affected by discord in international currency policies after the IMF's member countries failed to agree on a concrete plan to tackle global imbalances at multilateral meetings over the weekend. ID:ID:nN10287368

* Oil rose for a second straight session on Monday to top $83, lifted by the dollar's slide that bolstered the appeal of commodities as an alternative investment.

* European stocks inched higher, led by tech shares such as Nokia (NOK1V.HE), helped by a share price target upgrade from Goldman Sachs. Japanese markets were closed for a national holiday.

* U.S. stocks rallied on Friday, with the Dow closing above the 11,000 mark for the first time in five months as a surprisingly weak jobs report strengthened the case for a further monetary injection by the Federal Reserve.

* The Dow Jones industrial average .DJI gained 57.90 points, or 0.53 percent, to close at 11,006.48. The Standard & Poor's 500 Index .SPX rose 7.09 points, or 0.61 percent, to 1,165.15. The Nasdaq Composite Index .IXIC climbed 18.24 points, or 0.77 percent, to 2,401.91.

(Reporting by Blaise Robinson; Editing by Greg Mahlich)

Major European stocks opened slightly higher, mirroring gains in Asia and on Wall Street with the FTSEEurofirst 300 .FTEU3 rising 0.2 percent in early trade to 1,072.60.

Finance leaders meeting over the weekend in Washington produced no quick fix for global economic imbalances, suggesting the cheap money trade of selling dollars to buy emerging market assets and commodities looks set to continue for now.

That was further spurred by weaker-than-expected jobs data in the United States on Friday that raised the chances the Federal Reserve would inject fresh funds into the economy as soon as its November 2-3 meeting.

"At the end of the day we are going to have QE2 one way or the other and we are going to have currency rebalancing. The question is how to play this now," said Geoff Howie, sales and markets strategist at MF Global in Singapore, referring to a second round of quantitative easing.

One group that stands to benefit is commodities that stand to gain on the back of rapid growth in developing Asian economies as well as persistent dollar weakness.

Metals rallied with London copper hitting a fresh 27-month peak while Shanghai zinc futures rose 5 percent to its upside limit of 18.875 yuan a metric ton.

The dollar weakened broadly against a basket of currencies .DXY and against the yen fell as far as 81.37 yen, its lowest level in 15 years. It later recovered to 81.99.

Although Japan is closed for a national holiday on Monday, the dollar's slide put markets on alert for potential intervention by the Bank of Japan, especially since the G7 and the IMF didn't produce any overt criticism of Tokyo's yen selling.

But with the yen already trading above the levels at which the BOJ intervened last month and the dollar's persistent weakness, any impact from intervention may be short-lived.

"Corporate Japan is just going to have to wake up and deal with a yen at or around 80. No amount of intervention is going to make much difference," said Howie.

The MSCI Asia ex-Japan stock index .MIAPJ0000PUS rose 0.6 percent on expectations that a flood of investment funds into emerging markets would continue.

Hong Kong shares .HSI hit a more than 2-year peak, breaking out of a trading range that has held since November 2009 and leading a broad rally in Asian markets.

CORN RISES MOST SINCE 1972

Chicago corn jumped 8.5 percent for its biggest gain in 28 years, boosted by a U.S. government forecast that supplies in the world's top exporter would shrink to their lowest in 14 years.

CNOOC shares hit a three-year high on news of the deal with Chesapeake Energy Corp (CHK.N), which could be the start of more outbound acquisitions as the Chinese company races to meet its aggressive production growth forecasts to feed the country's fast-growing economy, analysts and bankers said.

"We expect them to expand their footprint in the Canadian oil-sands and also in Brazil's deepwater. That's the last frontier where you can extract big oil volumes," said Gordon Kwan, head of Asian energy research for Mirae Asset Securities, adding that Nigeria and Angola could also be attractive.

Canadian oil firm Opti Canada Inc (OPC.TO) and its peer Nexen Inc (NXY.TO) have drawn interest from CNOOC, Asia- and Canada-based bankers have said in recent months.

CNOOC, along with its peer Sinopec Group, is also bidding for stakes in assets owned by Brazilian oil and gas start-up OGX SA (OGXP3.SA) in a potential $7 billion deal, sources with direct knowledge of the matter said in mid-September.

The 10 deals so far this year for China's oil and gas companies have been worth $18.6 billion, already eclipsing the $15.8 billion in deals for all of 2009, according to data from Thomson Reuters.

Most of the outbound acquisitions by China's oil firms have been in risky areas such as Africa, which Western rivals have avoided, or in locations with aging assets.

Now they are also eyeing the United States, which was once deemed off limits to the Chinese due to protectionist sentiment.

"Ninety-five percent of the world's E&P (exploration and production) companies are in North America," said an Asia-based investment banker who has advised Chinese oil firms on outbound deals. "If you have to move the reserve needle, you have to buy U.S. companies."

U.S. oil and gas companies are gradually warming to Chinese investment, partly because their companies are now short of cash, Kwan of Mirae Asset said.

In contrast, China's state oil giants including PetroChina (0857.HK) (601857.SS) (PTR.N) and Sinopec (0386.HK) (600028.SS) (SNP.N) have access to ample credit, giving them more firepower to execute deals.

NO REGULATORY HURDLES

The Chesapeake agreement shows that China is confident that the purchase of a 33 percent stake in the Eagle Ford acreage in South Texas will get the backing of U.S. regulators and politicians, who stepped in five years ago to block CNOOC's effort to buy U.S. oil company Unocal.

Outside the energy realm, political concerns have also surfaced from time to time involving efforts by Huawei HWT.UL, China's top telecoms equipment maker, to crack the U.S. market.

While U.S.-China tensions over the value of China's currency persist, ties between the two countries have grown since 2005, with China becoming a major global economic force.