K+S shares surge after Potash Corp takeover approach
By Arno Schuetze and Ludwig Burger
FRANKFURT (Reuters) - Shares in German potash miner K+S (SDFGn.DE: Quote) leapt as much as 40 percent on Friday after a takeover proposal from Canada's Potash Corp of Saskatchewan (POT.TO: Quote), which sources close to the matter said was worth close to 8 billion euros ($8.9 billion).
K+S, which would become the first German blue-chip firm in a decade to be bought by a foreign company, said it was assessing its options after announcing the approach late on Thursday.
Two sources close to the matter said K+S would likely reject the proposal as too low.
K+S believes Potash wants to take capacity out of an over-supplied market to boost profitability, the sources said, adding it might close some of K+S's high-cost German mines and sell its salt business.
Potash Corp is operating well below full capacity because of weak prices for potash, which is mostly used in fertilizers.
Both companies declined comment on Friday.
One of the sources said Potash Corp proposed to pay 41 euros a share, a 41 percent premium to K+S's closing price on Thursday and 43 percent above the weighted six-month moving average price, according to Thomson Reuters data.
K+S shares rose 30 percent to close at 37.66 euros, after touching a three-year high of 40.285. Potash shares were down 2.4 percent in Toronto and New York in early afternoon. Continued...