* K+S shares close 30 pct higher
* Potash proposes 41 eur/shr - source
* German politician fears for mining jobs
* K+S will likely reject offer as too low -sources (Adds Potash shareholder comment, German politician's comments, updates share prices)
By Arno Schuetze and Ludwig Burger
FRANKFURT, June 26 (Reuters) - Shares in German potash miner K+S leapt as much as 40 percent on Friday after a takeover proposal from Canada's Potash Corp of Saskatchewan , 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.
K+S is the world's fourth-largest potash maker, trailing the North American export pact Canpotex made up of Potash, Mosaic Co and Agrium Inc, as well as Uralkali and Belaruskali.
A deal with Potash Corp would be the first big global potash merger since Uralkali bought Silvinit in 2011.
Potash Corp's bid is the latest move by a North American company on a European rival, as U.S. and Canadian firms take advantage of low interest rates and a weak euro.
U.S. seeds company Monsanto Co is trying to buy Swiss peer Syngenta AG, while in retail, Saks owner Hudson's Bay Co agreed this month to buy German department store chain Kaufhof.
Bernstein analysts said Potash was probably attracted by the 2 million-tonne Legacy potash mine, which K+S is constructing in Canada.
"An acquisition could prevent K+S's Legacy from becoming a market price spoiler as it adds capacity to already over-supplied global and North American markets," they said in a note.
Citigroup analyst Andrew Benson agreed, saying Potash could shut some of K+S's high-cost capacity in Europe.
Others questioned the proposal's rationale and said it would likely face stiff resistance.
The premier of the German state of Hesse, where K+S is headquartered, said local jobs must not be threatened.
One of the sources said the proposed offer did not reflect the value of the Legacy project. K+S has spent 2 billion euros on the mine, which is now 75 percent completed.
The proposal is Potash Corp's second tilt at K+S. A bid to acquire a majority stake in 1997 was blocked by Germany's competition watchdog.
The sources said, however, that antitrust hurdles would play a lesser role this time.
In 2010, Potash Corp itself was the target of a $39 billion hostile bid from mining company BHP Billiton, but that deal was foiled by the Canadian government.
Fears of a second approach by BHP may be behind Potash's attempt to bulk up, said John Goldsmith, vice-president of Potash shareholder Montrusco Bolton, which bought additional shares on Thursday.
"When one of the lowest-cost producers is buying a higher-cost producer, it doesn't make a lot of sense," he said. "Ultimately, this is possibly a way to stave off a second BHP bid."
The once-tight global potash market has become over-supplied, while competition has heated up since Uralkali and Belaruskali stopped selling potash together in 2013. ($1 = 0.8945 euro) (Additional reporting by Rod Nickel in Winnipeg and Euan Rocha in Toronto; Editing by Mark Potter and Matthew Lewis)