The Legacy mine construction site in Saskatchewan.
K+S AG won a major supply deal for its Legacy mine in Canada, giving Chief Executive Officer Norbert Steiner fresh ammunition as the tries to fend off a takeover bid from Potash Corp. of Saskatchewan Inc. which in his view undervalues the site.
K+S agreed to supply a Koch Industries Inc.'s fertilizer unit with about a quarter of the output from the mine, which is adjacent to the operations of Potash Corp. in Canada. "We are seeing enormous interest in potash from our Legacy mine both from existing and new customers," K+S board member Andreas Radmacher said in a statement Tuesday.
Steiner has argued that Potash Corp.'s 41 euro-per-share ($45) bid undervalues the $4.1-billion Legacy mine. The book value of the mine is about 11 euros per share, the CEO said in July, but taking into account future earnings from the site, he said it's worth as much as 21 euros a share.
Production is set to reach about two million metric tons by the end of 2017, and Koch has exclusive rights to about 453,000 metric tons. The mine is on track to start operating in mid-2016.
K+S shares had risen 0.2 per cent to 37 euros as of 9:28 a.m. in Frankfurt, valuing the company at €7.1-billion.
Potash has stuck by its bid, which valued K+S at €7.85-billion, while offering new site and job guarantees in a proposal the Kassel, Germany-based company rejected Aug. 7.