SASKATOON – Potash Corp. of Saskatchewan Inc. (TSX:POT) has reaffirmed its intention to acquire K+S AG despite repeated rebuffs from the German potash producer.
“We are continuing to seek a constructive dialogue with K+S to pursue a friendly transaction,” said PotashCorp president and CEO Jochen Tilk in a quarterly earnings conference call.
Last month, PotashCorp told K+S it was willing to pay 41 euro per share for the company, a price rejected by the K+S board as too low.
READ MORE: K+S AG rejects takeover bid by PotashCorp
During the call, Tilk addressed some of the concerns K+S has expressed about the deal, though he emphasized that PotashCorp has not yet made a formal offer.
“Our proposal isn’t predicated on job cuts, mine closures or selling the salt business,” Tilk said.
“Our plan would be to operate the German potash mines and salt business in the same manner as K+S.”
Tilk also committed to completing the construction of K+S’s Legacy potash project in Saskatchewan and keeping the K+S brand active and headquartered in Germany.
“We are prepared to make binding commitments that provide these assurances,” he said.
Addressing PotashCorp shareholders, Tilk said he was confident the transaction wouldn’t be at the expense of its dividend or investment credit rating.
“Our two companies bring together complementary assets with minimal overlap of operations and markets,” said Tilk. “The combined company would be well-positioned to serve marketplaces around the world and further expand into emerging markets like Africa.”
PotashCorp earned US$417 million in its latest quarter, down from a year ago. Weaker nitrogen prices, brought about by increased supply and lower demand, were behind the drop in earnings, Tilk said.
READ MORE: PotashCorp reports Q2 profit and sales down from year ago
The fertilizer producer, which reports its results in U.S. dollars, says the profit amounted to 50 cents per share, down from $472 million or 56 cents per share a year ago.
Sales slipped to $1.73 billion compared with $1.89 billion a year ago.
The company also narrowed its outlook for the year as it said it now expects potash sales to be between 9.3 million and 9.6 million tonnes. That compared with earlier expectations of between 9.2 million and 9.7 million tonnes.
PotashCorp also said it expects its earnings per share for the year to come in between $1.75 and $1.95. That compared with earlier guidance for between $1.75 and $2.05 per share.
— By Ian Bickis in Calgary.
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