* Potash could offer 40 eur/shr for K+S - Handelsblatt
* Would value K+S at more than 7 bln euros - Handelblatt
* Potash declines to comment
* K+S shares up 13 pct in after-hours trading (Adds no comment from Potash, background, updates shares)
FRANKFURT, June 25 (Reuters) - 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 programme 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) (Reporting by Harro ten Wolde and Rod Nickel; Editing by Elaine Hardcastle; Editing by David Goodman)