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.
