By Eyk Henning and Neetha Mahadevan
FRANKFURT--K+S AG on Friday said it rebuffed another unsolicited
takeover approach from Canadian rival Potash Corp of Saskatchewan
Inc. that valued the German salt and fertilizer company at EUR7.9
billion ($8.63 billion).
The company said the proposed takeover price was unchanged at
EUR41 a share. However, Potash's new overture came with a business
combination agreement--more concrete than the initial informal
approach--that included commitments on job security, according to
people familiar with the matter.
The move increases pressure on K+S, which rejected Potash's
earlier approach in July, saying it undervalued its projects and
products and could compromise jobs.
K+S shares rose more than 1% to trading above EUR37 in response
to the news.
A combination of K+S and Potash, if successful, would be the
largest mining deal since Glencore International PLC's takeover of
Xstrata PLC for almost $30 billion in February 2012. Both companies
mine potash, a fertilizer, and a tie-up would create a giant that
could control as much as 30% of the global market.
Bankers and analysts have said that Potash is especially keen on
a mine K+S is developing in the western Canadian province of
Saskatchewan because it would help the company gain control over
production capacities and price power in negotiations with
farmers.
Potash Chief Executive Jochen Tilk said in late July he believes
a combination with K+S would benefit the companies and that he
remains interested in holding talks with K+S management because a
merger would "enhance the breadth of each company's respective
portfolio, improve cash flow capabilities and provide a more stable
operating environment."
Mr. Tilk, a German, added that Potash, would seek a friendly
acquisition of K+S and that he was willing to make a binding
commitment to ensure that K+S operates as a separate brand and
keeps its headquarters in Germany.
He stressed that Potash is committed to building K+S's $4.1
billion potash mine in south Saskatchewan, the first such mine to
be built in the Canadian province in 40 years. The Legacy mine is
expected to start production late next year and reach full capacity
of 2.86 million metric tons by 2023.
Write to Eyk Henning at eyk.henning@wsj.com and Neetha Mahadevan
at neetha.mahadevan@wsj.com
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