FRANKFURT, Germany (Reuters) — Salt and fertilizer group K+S has rejected a new attempt by Canada’s PotashCorp to entice the German company into takeover talks, a K+S spokesperson said today.
K+S earlier this month rebuffed PotashCorp’s 7.9 billion euros ($8.65 billion) proposed bid of 41 euros per share as too low and suggested the suitor was planning to shrink the company.
A K+S spokesperson said PotashCorp chief executive officer Jochen Tilk had met the state premier of the German regional state of Hesse, where K+S is headquartered, and had handed over documents about PotashCorp’s plans to preserve jobs after a takeover. K+S was also given the documents.
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“We’ve looked into these statements and concluded that they contain nothing substantial beyond what we had already been given in writing. That’s why we still see no basis for talks,” the spokesperson said.
A Hesse government spokesperson confirmed the meeting had taken place at the request of PotashCorp but declined to comment further. State premier Volker Bouffier has said he would fight to preserve K+S’s German sites.
A Germany-based spokesperson for Potash Corp said the company had in the meetings laid out the advantages of a tie-up for K+S and PotashCorp, while trying to allay the state of Hesse’s concerns.
K+S has suggested that about 40 percent of its German operations were at risk because PotashCorp has more cost effective idle capacity in Canada.
Analysts and investors say this is an exaggeration, citing prohibitive shipping costs from PotashCorp’s main hub in Saskatchewan to Europe.
PotashCorp previously committed funds to boost its annual capacity to more than 17 million tonnes over the next few years, up from almost 11 million tonnes in 2015, but it is now reining in production amid a boost in supply from major rivals Uralkali and Belaruskali, who stopped collaborating two years ago.
