* Saskatchewan to release report Monday on takeover impact
* Report to consider three scenarios for Potash takeover
* Province likely to sway Ottawa in decision on bid
* BHP says set to challenge Potash Corp's lawsuit
WINNIPEG, Oct 1 (Reuters) - A far-reaching, independent
report on the economic impact of a Potash Corp
The report, due out on Monday, will consider three possible scenarios, including a Chinese-led bid for the world's largest fertilizer supplier, its author said on Friday.
While the report's findings are expected to be influential, a final decision on whether a bid represents a "net benefit to Canada," as the Investment Canada Act stipulates, is still weeks away.
Glen Hodgson, chief economist at the Conference Board of Canada, said his report considered the impact of an industry-led takeover such as BHP's initiative; a move by a potash-consuming nation such as China; and a takeover by an investment board or sovereign fund.
The 50-to-100-page report makes no recommendations, Hodgson said. "We certainly point to the implications and offer a few thoughts on adjustments that could be made," he said in an interview.
Potash, based in Saskatchewan, has rejected BHP's bid as inadequate and said other parties that are interested in tabling alternative proposals have approached it. The company is the No. 1 global supplier of a commodity needed to help feed the growing populations of China, India and other nations.
After releasing the report to the public on Monday,
Saskatchewan will take days, perhaps weeks, to finish preparing
its presentation to federal officials, a government source
said. Influenced by the province, Ottawa could then veto any
deal it believes would not have a net benefit for Canada.
For more stories on BHP/Potash: [ID:nN22340110]
Timeline: http://link.reuters.com/nav26p
Potash market overview: [ID:nSGE67J088]
Factbox on Potash Corp, BHP Billiton: [ID:nN17274108]
Chinese chemical maker Sinochem <600500.SS> has approached
several parties, including Russian fertilizer maker Uralkali
"Sinochem in China would be a very, very good example of the kind of organization that could be working probably in the interest of consumers, and we try to work through these conceptual scenarios," Hodgson said.
As China is the world's top potash consumer, Premier Brad Wall of Saskatchewan has said he's concerned that the Asian country's interests are to weaken prices of the crop nutrient if it took over the company.
Provincial authorities have already seen versions of the report, and the Conference Board is now making final revisions before the province releases the report publicly on Monday.
Regarding the BHP bid, the provincial government as recently as Wednesday repeated concerns that a successful bid by the Anglo-Australian mining giant could slash royalty and corporate tax revenues.
The province's submission to Ottawa is likely to red-flag the province's concerns about BHP skirting the Canpotex marketing cartel and thereby weaken both potash prices and royalties.
Prime Minister Stephen Harper has already said the province's submission would influence his government's response to a takeover bid.
BHP also faces opposition in court. It said on Friday it expected to lodge a motion within the next few days to challenge a lawsuit filed by Potash Corp to fend off the miner's $39 billion hostile takeover bid.
BHP said its lawyers were finalising details of the dismissal motion which could be filed as early as Friday.
"Sometime in the next few days is right," a BHP spokeswoman said when asked about the timing.
Potash filed a lawsuit in the U.S. District Court in Chicago last week, alleging that BHP misrepresented material facts related to its bid for the world's largest producer of potash.
BHP has said previously it planned to "vigorously" contest the lawsuit. ($1 = C$1.03)
(Reporting by Michael Smith in Sydney, Rod Nickel in Winnipeg and Louise Egan in Ottawa; Editing by Frank McGurty)