BHP Billiton will soon get a sense of the regulatory hurdles facing its $US38.7 billion ($42.5bn) hostile bid for Potash Corp.

It will also soon learn whether it will need to sell $US8bn of equity investments, with US competition regulators to decide by Tuesday whether the bid warrants extra scrutiny.

BHP is understood to believe the bid does not raise any substantial competition issues, because its only potash assets are projects not expected to come into production until the middle of the decade.

A 15-day waiting period for cash offers under US anti-trust provisions expires on Tuesday, when the Federal Trade Commission will decide whether it needs to issue what is known as a second request, but the FTC can delay this decision.

"We expect a second request to be issued to BHP as Potash Corp sells a significant amount of product in the US within a concentrated market," Credit Suisse analyst Paul McTaggart said.

"We would expect approval under US anti-trust provisions but, nevertheless, a thorough investigation would be necessary."

Regulators could order BHP to sell Potash Corp's equity investments in a number of fertiliser companies to reduce the potential influence over global potash supply, Credit Suisse said in a client note.

"This would work in BHP's favour insofar as it would bring $US8bn in cash back into the balance sheet to reduce debt levels," Mr McTaggart said.

Potash Corp owns a 32 per cent stake in Chile's SQM, 14 per cent of Israel Chemicals, 28 per cent of Jordan-based Arab Potash and 22 per cent of China's Sinofert.

BHP chief executive Marius Kloppers is meeting his big investors in coming weeks in a bid to convince them of the merits of his $US130-a-share tilt for Potash Corp. The bid has been rejected by the Canadian target as being opportunistic and not recognising the company's value.

According to a Reuters survey of 26 shareholders holding a total of 4 per cent of BHP's stock, the average maximum bid price shareholders would stomach was $US155 a share.

If the bid goes this high, it is likely it would go to a shareholder vote.

Under British laws, if the target makes up more than 25 per cent of the predator's market value, a shareholder vote is needed.

Given BHP's shares are down 9 per cent since the bid was launched, Credit Suisse says if BHP raises its bid to $US139 or above, a shareholder vote would be needed.

Potash Corp shares slipped $US1.30 to $US145.95 yesterday in the US, a 12 per cent premium to BHP's bid.

Source: The Australian