(Corrects name of analyst in paragraph 8)
* K+S agrees supply deal with Koch for 1/4 of Legacy's
capacity
* K+S is trying to fend off 7.9 bln euro bid from Potash
* Analyst sees deal as negative for K+S value
FRANKFURT, Aug 18 (Reuters) - Germany's K+S SDFGn.DE
signed a supply deal for potash fertiliser from its Legacy mine
in Canada, saying the agreement strengthened its position as an
independent supplier as it battles an unwanted takeover bid from
Canada's Potash POT.TO .
The salt and fertiliser producer said it had agreed an
exclusive deal to supply Koch Fertilizer with 500,000 tonnes per
year of granular potash for Koch's U.S. customers, representing
about a quarter of the mine's capacity.
"This relationship highlights our position as a reliable and
independent supplier in the market," K+S executive board member
Andreas Radmacher said in a statement.
It said it would not provide further details of the deal.
The Legacy mine K+S is building in the prairies of western
Canada will be the first built from scratch in the oversupplied
global potash industry in almost 40 years and is thought to be a
motivator of Potash's 7.9 billion euro bid.
The acquisition of the Legacy mine could enable Potash to
better control supply in North America and support prices.
K+S has rejected the bid as undervaluing the company but has
left the door open to an improved offer. ID:nL5N10O0J9
Scotiabank analyst Ben Isaacson said the agreement was
negative for K+S shareholders as it undermined the
attractiveness of the company to Potash and would make it tough
to keep prices for the commodity above marginal costs.
"K+S continues to make itself less attractive to POT. It is
challenging to see how K+S is trying to maximise shareholder
value (via POT's offer)," he wrote.
"Institutional K+S shareholders we spoke with overnight are
frustrated by this move, and correctly so, in our opinion."
K+S said it had not received any negative feedback from
investors about the Koch deal.
Shares in K+S fell 1.7 percent to 36.32 euros, still 25
percent above their pre-offer price, and were the third-biggest
decliners in a 0.3 percent-weaker German blue-chip DAX .GDAXI .
Potash shares were little changed by 1437 GMT.