German potash producer K+S said on Thursday it has received a takeover proposal from larger Canadian fertilizer producer Potash Corp of Saskatchewan Inc, potentially marking the start of a new takeover saga in the industry.

K+S said it was assessing its options. Two sources close to the matter however, said K+S will likely reject the 7 billion euro ($7.8 billion) takeover offer as being too low. The sources said the offer values K+S at just over 40 euros a share.

One of the sources said that the offer is "opportunistic" as it does not reflect the value of the Legacy potash project that K+S is building in Canada. K+S has spent 2 billion euros on that mine that is now 75 percent completed.

Saskatoon, Saskatchewan-based Potash Corp confirmed that it has made a "friendly proposal to K+S," adding that "there is no certainty that any offer will ultimately be made."

This is Potash Corp's second tilt at K+S. A bid to acquire a majority stake in 1997 was blocked by the German competition watchdog. In 2010, Potash Corp itself was the target of a $39 billion hostile bid from mining giant BHP Billiton, but that deal too was foiled after the Canadian government blocked it.

Since then, the once tight global potash market has turned. Potash Corp, long the swing producer, has seen that role eroded in recent years as the potash market has become over-supplied. Miners have built capacity, and competition among sellers has heated up since the 2013 breakup of Belarussian Potash Company, one of the world's biggest potash trading partnerships.

UBS analyst Brian MacArthur, in a note to clients, said it is hard to evaluate a deal without details, but added he thinks that a "deal might make strategic sense for Potash Corp given potential operating, logistics, and marketing synergies."

The German company's shares were up 13.3 percent at 32.45 euros in after-hours trading in Frankfurt. The shares had closed 1.5 percent higher at 29.05 euros in the regular trading session before the report came out.

Shares in Potash Corp, which is mulling selling its shares in Chile's SQM and Israel Chemicals, ended up nearly 5 percent in New York at $31.89.

Potash Corp, which is finishing a big expansion program that should free up cash flow, is currently operating well below full capacity because of weak potash prices.