Potash Corporation of Saskatchewan Inc is eyeing German peer K+S for a possible takeover bid, German newspaper Handelsblatt reported on Thursday, citing financial sources.

Canada's Potash Corp could offer 40 euros per share, which would value K+S at more than 7 billion euros ($7.8 billion), Handelsblatt wrote in a pre-release of a story to be published on Friday.

A spokesman for Potash declined to comment. K+S did not reply to requests for comment.

The German company's shares were up 13.3 percent at 32.45 euros in after-hours trading in Frankfurt.

The shares closed 1.5 percent higher at 29.05 euros after the regular trading session before the report came out.

Potash Corp is finishing a more than $8-billion expansion program that should free up cash flow and is reviewing its stakes in China's Sinofert Holdings Ltd, Israel Chemicals, Jordan's Arab Potash Co PLC and Chile's SQM.

The firm is operating below full capacity because of weak prices since the 2013 breakup of one of the world's biggest potash trade partnerships, Belarussian Potash Company (BPC). The breakup of BPC increased competition among sellers of the crop nutrient. ($1 = 0.8931 euros)

K+S will likely reject a 7 billion euro ($7.8 billion) takeover offer from Canadian fertilizer group Potash Corp, a person familiar with the situation said on Thursday.

K+S's management and board is still due to discuss the offer from Potash, whose full name is Potash Corporation of Saskatchewan Inc, and a decision has not yet been taken, but at first sight the bid is deemed as too low and making little strategic sense, the person said.

The value of a mine that K+S is currently building in Canada is so far not reflected in K+S's share price and Potash's move for the German company is therefore seen as opportunistic and undervaluing K+S.

"The strategy for Potash is to take capacity out of the market to increase its own returns," the source said, adding that K+S would likely see its relatively high-cost German mines closed after a such deal.

K+S, which has a potash and salt business, also fears that Potash will sell the salt business after any deal, the source said.