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Work at K+S Legacy potash project. (Image courtesy of K+S)
German company K+S AG has once again rejected Canada’s Potash Corp.’s (TSX:POT) takeover offer, saying the Saskatoon-based firm’s promise to keep current local jobs and mine sites was unreliable.
Saskatoon-based Potash Corp sent a fresh unsolicited letter to K+S’s management and supervisory boards, K+S said in its website Friday. The document included a proposal for a “business combination agreement” based on an unchanged price of 41 euros ($44.82) per share.
“We are still convinced that the proposed price of 41 euro per share does not at all reflect the fundamental value of K+S,” Norbert Steiner, CEO of K+S, said in the statement.
The Canadian potash miner, which is the world’s second-largest producer of the fertilizer ingredient, is hoping to take over rival K+S, as global competition among sellers deepens.
The German company, which already rejected a first takeover approach by Potash Corp. in early July, has already spent two billion euros on its Legacy project, located in southern Saskatchewan. The development, the first potash mine being developed from scratch in 40 years, is expected to begin mid-2016.
Last week, PotashCorp president and CEO, Jochen Tilk, said the takeover proposal wasn’t based on job cuts, mine closures or selling K+S’s salt business, adding it would go ahead with K+S’ Legacy potash project, exporting its production through Canpotex.
If the merger succeeds, Potash Corp. would regain some of its historic dominance over the fertilizer market, as the two combined companies would account for 30% of global potash production.
