Agrium Makes Final CF Offer

Agrium Inc. says it has made its best — and final — offer for CF Industries Holdings, Inc.

Agrium Inc.announced Nov. 5 that it is increasing its exchange offer to acquire all of the outstanding shares of CF Industries Holdings, Inc. to $92.99 per CF share based on Agrium’s closing stock price on Nov. 4, 2009. Under the terms of this best and final offer, CF stockholders would receive $45.00 in cash, an increase of $5.00, or 12.5 percent, in the cash consideration, and one common share of Agrium for each CF share.

This offer provides a premium of more than 67 percent to CF’s closing price on Feb. 24, 2009, the day before Agrium announced its initial proposal, and about 84 percent to CF’s 30-day volume weighted average price through that date. This offer represents a compelling multiple based on CF’s 2010 ‘owned’ EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), particularly in relation to CF’s historical trading multiples, according to Agrium.

Agrium has extended the expiration date of the exchange offer until midnight Eastern time on Nov. 18, 2009.

“This is Agrium’s best and final offer,” says Mike Wilson, Agrium president and CEO. “We have addressed all Canadian and U.S. regulatory concerns and are prepared immediately to execute a fully financed, binding merger agreement. Given that CF has consistently refused to engage with us, this is CF stockholders’ final opportunity to make it clear to the CF board that they want to receive a premium rather than pay one. We will listen to and respect the wishes of CF’s owners. CF stockholders must tender their shares by Nov. 18 to send an unambiguous message that they want this deal with Agrium at this price.”

CF Industries confirmed that it received the revised proposal fro Agrium. According to a press release, “CF Industries noted that Agrium’s offer represents substantially lower multiples of EBITDA than CF Industries’ offer for Terra Industries Inc. CF Industries’ board of directors will in due course review the latest revised proposal.”

Where Terra Fits In

Agrium has entered into a Consent Agreement to resolve the concerns of the Canadian Competition Bureau and has received a “no action” letter from the Bureau. Under the terms of the Consent Agreement and pursuant to a recently announced agreement entered into with Terra Industries Inc., Agrium will divest to Terra 50 percent of Agrium’s ammonia and urea production complex in Carseland, Alberta. Agrium and Terra have also agreed to a five-year supply contract in which Terra will receive a minimum of 60,000 metric tonnes of urea per year. During the course of the Bureau’s review, Bureau staff cooperated closely with their counterparts at the U.S. Federal Trade Commission.

(Sources: Agrium; CF Industries)

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