* Potash Corp had offered 41 euros per share in cash
* K+S had refused to negotiate, deeming bid too low
* K+S was skeptical of Potash Corp's assurances on jobs
(Adds context on deal, details)
By Greg Roumeliotis
Oct 5 (Reuters) - Potash Corp of Saskatchewan POT.TO said
it had withdrawn its 7.9 billion euro ($8.9 billion) offer for
German potash producer K+S SDFGn.DE , citing a decline in
global commodity and equity markets and a lack of engagement by
K+S management.
The acquisition would have given Potash Corp an opportunity
to realize savings from selling potash within North America from
its own Western Canada mines jointly with potash from K+S's
Legacy mine, which is under construction in the region.
But senior K+S executives dismissed Potash Corp's bid 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 around 40 percent amid concerns over weakening demand
from China, the world's largest consumer of potash.
"In light of these (challenging) market conditions and a
lack of engagement by K+S management, we have concluded that
continued pursuit of a combination is no longer in the best
interests of our shareholders," Potash Corp Chief Executive
Jochen Tilk said in a statement early on Monday.
Potash Corp had offered K+S 41 euros per share in cash. This
reflected a 59 percent premium to the volume-weighted average of
K+S's share price during the prior 12 months. K+S shares ended
trading on Friday at 31.34 euros.
Potash Corp had no problem financing the offer despite debt
markets becoming pricier, according to people familiar with
matter who asked not to be identified as the matter remained
confidential. Potash Corp now plans to focus on its growth
strategy, the people added.
Tilk said on Sept. 16 that Potash was not actively
discussing its takeover proposal with K+S but remained
interested in a combination of the fertilizer producers that
would aid North American potash sales and offer new access to
Europe. ID:nL1N11M19J
K+S had voiced fears that Potash Corp could dismantle the
company and eliminate jobs, and that its pledges to the contrary
were too vague. Potash Corp argued that its proposal was not
based on closing mines, curtailing production, selling K+S's
salt business or cutting jobs.