* K+S says 41 eur/shr offer disregards value of new Canadian mine
* Suitor not interested in keeping business in current form - K+S
* Legacy mine worth up to 21 eur/shr - K+S
* K+S shares down 2 pct at 37 euros (Adds CEO comments, background)
By Ludwig Burger
FRANKFURT, July 2 (Reuters) - German potash miner K+S said Potash Corp of Saskatchewan's 7.85 billion euro ($8.70 billion) takeover approach was too low and the Canadian firm could be planning to dismantle and downsize its rival, putting jobs at risk.
Potash Corp's 41 euro per share takeover proposal "completely disregards" the value of a Canadian mining project under construction known as "Legacy", which should be up to 21 euros per share when the book value of the mine and future cash flows from 2017 onwards are taken into account, K+S said on Thursday.
K+S, whose stock was down 2 percent at 37 euros at 1422 GMT, said it was not convinced that Potash Corp was interested in continuing the German group's fertiliser and salt businesses in their current form.
K+S is the world's largest salt supplier but derives most of its earnings from potash fertilisers.
"Potash Corp sites in Canada produce at significantly lower costs than our German sites. But they are under-utilised. Obviously, it makes ultimately little sense for PotashCorp to operate our German sites at the current level," Chief Executive Nobert Steiner said.
The offer values the German group's equity at 7.85 billion euros, or 9.5 billion euros when net debt of 1.65 billion euros is included.
K+S said the stock market was currently not attributing any value to Legacy, the first new mine in the potash industry in almost 40 years, which will start producing by the end of 2016.
"It is clear that Potash Corp is trying to take advantage of this valuation gap to acquire K+S at a bargain price to gain control of Legacy," the CEO said.
Potash Corp, the world's largest fertiliser company by capacity, does not plan any closures at K+S AG if its bid for its German peer proves successful, people familiar with the matter told Reuters on Sunday.
But K+S said on Thursday Potash had made no firm commitments to protect the interests of the more than 14,000 employees of K+S worldwide.
"Despite repeated requests to address this question, PotashCorp's answers have remained vague", K+S said in a statement. ($1 = 0.9023 euros) (Reporting by Ludwig Burger; Editing by Arno Schuetze and Elaine Hardcastle)