This time last week, it was announced by K+S Kali, the German potash producer, that it had received a takeover bid from the Canadian fertiliser company, PotashCorp of Saskatchewan, the world’s largest potash producer.

PotashCorp described the takeover bid as a “friendly proposal”, offering €41 per share that put a value on K+S of €7.8bn. However, as expected, senior management at K+S have rejected PotashCorp’s initial offer claiming it did not “reflect the fundamental value of K+S” and any sale would not be in the best interests of the company.

Norbert Steiner, chief executive of K+S said the offer from PotashCorp disregarded the value of Legacy, a greenfield project situated in Canada currently being developed by K+S that is due to start producing potash by the end of 2016.

K+S has already invested more than €2bn in the project and believes it should start to add to cashflow from 2017 onwards. K+S expects group earnings (EBITDA) to increase to €1.6bn by 2020 with the Legacy project contributing annual cash flow growth of 10% on average up to 2020.

PotashCorp said it felt its offer of €41 per share, which represents a 57% premium on the 12 month average price of K+S shares, represented good value to K+S shareholders. However, some analysts have stated that an offer closer to €55 per share may be needed, valuing K+S at more than €10.5bn.

PotashCorp said the proposal would bring together “two best-in-class companies” that held complementary assets and would result in minimal business overlap. A takeover would give PotashCorp control of about one-quarter of global potash supply, a key component in fertiliser production.

However, there are concerns in Germany that were PotashCorp to complete a takeover of K+S it would result in job losses and possible mine closures. In Germany alone there are more than 30,000 direct and indirect jobs associated with the raw material production and mining of mineral nutrients carried out by K+S.

PotashCorp says these concerns can be addressed and an agreement reached through further talks.

K+S shares hit an all time high of just over €40 in 2012, before plunging to under €16 in July 2013. They have since recovered and closed at €39 this week.