Anglo-Australian miner BHP Billiton Ltd. is likely to ask Canadian regulators to strike down a 'poison pill' that Potash Corp. of Saskatchewan Inc. put in place to stave off BHP's $38.6 billionhostile bid, people familiar with the process said Tuesday.

Potash Corp. implemented a shareholder-rights plan, which is supposed to last 90 days, after it rejected BHP's $130-a-share offer last week as inadequate. Under the antitakeover plan, known as a poison pill, existing Potash Corp. shareholders would have the right to buy discounted shares if any single shareholder took a 20% or greater stake in the Saskatoon, Saskatchewan, company, making a takeover prohibitively expensive.

Fertilizer maker Potash Corp. is using the poison pill as a way to halt BHP's advances while it seeks out other potential bidders.

But Canadian takeover rules treat poison pills more harshly than U.S. regulations. In Canada, regulators have long held the view that all shareholders should be treated equally. When BHP asks that the pill be struck down in the weeks ahead, it is likely to win the request, say Canadian lawyers. That means that Potash won't even have 90 days to find an alternative option.

'Essentially, poison pills are always struck down in Canada so it can't be used to stop a takeover,' said Randall Morck, director of the Canadian Corporate Governance Institute. 'The pill only buys you time so the best solution is to find another bidder,' he said.

BHP is likely to have an indication on whether its offer will clear regulatory scrutiny in about 45 days, people familiar with the process said. Once the mining giant knows it will likely receive regulatory approval, it will go before the Saskatchewan Securities Commission to ask the body to strike down Potash's pill, these people added.

If another buyer comes forward with a matching or topping bid, BHP would then have 35 days to assess that offer and decide if it wants to respond. If a white knight appeared for Potash Corp., BHP would also accelerate the time frame in which it would ask securities regulators to strike down Potash's poison pill, said people familiar with the process.

Because the poison-pill duration could be short, Potash hasn't wasted any time in trying to find alternatives to BHP's bid. Chief Executive Bill Doyle has said in several interviews that the company isn't opposed to a sale, but will only agree to one at the right price. The company is also exploring joint ventures, stake sales and other options, including a buyer that could top BHP's offer.

A consortium led by Chinese private-equity fund Hopu Investment Management Co. is considering a possible bid for Potash, a person familiar with the situation said. The group includes investors from Canada, the U.S. and Asia, and includes at least two sovereign-wealth funds, the knowledgeable person said.

Gina Chon / Anupreeta Das