RPT-UPDATE 2-Potash Corp withdraws $8.9 bln takeover bid for German peer K+S – by Greg Roumeliotis and Arno Schuetze (Reuters U.S. – October 5, 2015)


NEW YORK/FRANKFURT, Oct 5 (Reuters) – Potash Corp of Saskatchewan said on Monday it had withdrawn its 7.9 billion euro ($8.9 bln) offer for German potash producer K+S , citing a decline in global commodity and equity markets and a lack of engagement by K+S management.

K+S shares dropped 24 percent after Potash announced its decision in a statement, wiping almost 1.5 billion euros off the company’s market value.

An acquisition of K+S would have given Potash Corp an opportunity to realize savings from selling potash within North America from its own Western Canada mines and from K+S’s Legacy mine, which is under construction in the region.

However, senior K+S executives dismissed the Canadian company’s 41-euro-per-share cash bid — which represented a 59 percent premium to the volume-weighted average of K+S’s share price during the prior 12 months — as too low and refused to negotiate.

Since Potash Corp made its offer to K+S privately at the end of May, shares of K+S peers have dropped by around 40 percent amid concerns over weakening demand from China, the world’s largest consumer of potash.

“We withdrew our proposal, frankly, with some disappointment as the strategic rationale for the transaction was compelling in our view,” Potash Corp’s Chief Executive Jochen Tilk said in a letter to K+S’s supervisory board dated Oct. 4, which was obtained by Reuters.

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