K+S rejects PotashCorp offer, promises on German mines

Frankfurt | Reuters — German salt and fertilizer company K+S AG once again rejected PotashCorp’s takeover offer Friday, saying the Canadian company’s assurances about maintaining jobs and mine sites in Germany were unreliable.

Saskatoon-based PotashCorp sent an unsolicited letter to K+S’s management and supervisory boards, K+S said in a statement. The letter included a proposal for a “business combination agreement” based on an unchanged price of 41 euros (C$59) per share.

The price is too low, and PotashCorp’s commitments on maintaining jobs and keeping mining sites open in Germany are not enforceable, K+S said.

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PotashCorp, the world’s second-largest potash miner, wants to acquire No. 5 producer K+S as global competition ramps up among sellers. K+S has suggested PotashCorp plans to shrink the company.

A PotashCorp representative confirmed the company sent a “private letter” to K+S’s boards, but would not comment further.

Shares of PotashCorp eased in New York and Toronto, while K+S stock climbed 1.4 percent in Frankfurt.

PotashCorp has been pushing to talk with K+S management despite the German company’s initial rejection last month of the Canadian company’s 7.9 billion-euro (C$11.3 billion) bid.

Analysts have speculated PotashCorp wants to acquire K+S, a higher-cost producer, to shut some production to support prices.

People familiar with the situation told Reuters that PotashCorp offered K+S a guarantee it would keep German mines operating for five years.

If it acquires K+S, PotashCorp would finish building the German company’s Saskatchewan mine and sell its potash offshore through Canpotex, PotashCorp CEO Jochen Tilk said on July 30.

Andreas Cremer and Patricia Weiss report for Reuters from Frankfurt. Additional reporting for Reuters by Rod Nickel in Winnipeg and Greg Roumeliotis in New York.

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