Saskatchewan's securities regulator will hear BHP Billiton's challenge to Potash Corp's shareholder rights plan on Nov. 8-9, assuming the federal government allows BHP's $39 billion bid to proceed.

In documents filed with the Saskatchewan Financial Services Commission, BHP seeks to suspend the rights plan, an anti-takeover defense known as a "poison pill" that Potash launched to stave off the Anglo-Australian miner. The plan would take pressure off Potash while it waited for a rival bid to emerge.
Potash Corp has already had enough time to find an alternative to its offer, BHP said in its written submission to the regulator disclosed on Monday. BHP offered to buy the world's largest fertilizer supplier in late August.

"No alternative to the offer has emerged and none is reasonably likely to emerge," BHP wrote. "The time has come for the Potash Corp rights plan to go."

Potash Corp spokesman Bill Johnson said the company will file its submission to the commission later this week.

Potash Corp, which produces more potash than any other company in the world, is based in the Canadian prairie province of Saskatchewan, which holds vast underground reserves of the crop nutrient.

The rights plan is designed to dilute the holdings of any shareholder that amasses at least 20% of the outstanding common shares. That makes it prohibitively expensive for an aggressor to gain a majority. The "poison pill" accomplishes the dilution by giving other shareholders the right to buy more stock at a deep discount.

Saskatchewan Ministers In Ottawa
The hearing will take place in the provincial capital of Regina less than a week after the deadline for the Canadian government to decide whether to allow BHP's bid to proceed under the Investment Canada Act.

The law allows Ottawa to block any takeover by a foreign-based company if officials deem that a deal would not provide "net benefit" to Canada.

Saskatchewan is urging the Canadian government to reject the takeover and has sent two cabinet ministers to Ottawa, where they are scheduled to meet with legislators on Tuesday.

Saskatchewan Premier Brad Wall on Tuesday warned of the implications of a foreign takeover of Potash, saying Ottawa should consider Australia's rules for reviewing foreign investment.

Wall said Australia, where BHP is based, assesses the national interest of takeovers by considering several factors, including control of the global supply of a product or services. Canada has just over half of the world's potash reserves, with most of them in Saskatchewan.

"So these are hardly the concerns of a 'banana republic' as some have suggested," Wall said. "These are legitimate issues that are considered by Australia's national government and that should be considered by Canada's national government."

Wall has also said a takeover by BHP would threaten expansion plans by potash miners Mosaic Co and Agrium Inc, and would cost Saskatchewan C$3 billion to C$6 billion ($2.9 billion to $5.9 billion) over 10 years in lost taxes and royalties.