Agrium Urges CF Stockholders To Tender Shares By Nov. 18

To create a sort of stockholder straw poll, Agrium sent a communication to CF Industries stockholders on Thursday, Nov. 12, asking them to send a clear message of support for the Agrium offer to purchase CF to the CF Industries board.

“Agrium has made its best and final offer worth $97.47 per CF share (based on Agrium’s closing price of $52.47 on November 11, 2009)," reads the letter. “Tender your shares by November 18, 2009 to send a clear message to the CF Board that you want to receive a premium, not pay one.”

“If we receive your resounding support and CF refuses to act, Agrium will consider all options, including litigation and nominating a slate of directors.”

The text of the letter reads as follows in italics:

Dear Fellow CF Industries Stockholder:

On November 5, 2009, Agrium increased its offer to acquire all of the outstanding shares of CF Industries Holdings, Inc. Our clear and unambiguous offer of $45.00 in cash and one common share of Agrium for each CF share is equivalent to $97.47 per CF share, or total consideration of approximately $4.9 billion, based on Agrium’s closing stock price of $52.47 on November 11, 2009.

Our revised offer represents a 106% premium to CF’s January 15, 2009, price of $47.23, and a premium of over 75% to CF’s closing price of $55.58 on February 24, 2009, the day before Agrium announced its initial proposal. Since Agrium’s initial proposal in February, the total value of our offer has increased approximately $1.3 billion, or 36%.

AGRIUM’S OFFER IS SUPERIOR TO ANY ALTERNATIVE ARTICULATED BY CF

Despite your strong support – and CF’s assurance to leading independent proxy advisory firm RiskMetrics that they would engage – CF has rebuffed Agrium’s efforts and ignored you, its stockholders, for nearly 9 months.

CF’s actions have left us with no choice but to again take our offer directly to you. Only with your overwhelming support do we believe CF’s board will finally be compelled to enter into a merger agreement with Agrium.

The CF board should exercise good corporate governance and allow its stockholders to determine if they want to receive a premium or pay one. After 9 months, it’s time for CF to listen to its stockholders. Tender your shares to tell the CF board you want this deal at this price.  

WE HAVE A CLEAR PATH TO COMPLETION
Agrium’s offer is fully financed. We have satisfied all related regulatory issues in Canada, and we expect to complete the resolution of regulatory issues in the U.S. shortly. We have a clear path to completion and are prepared to immediately execute a fully financed, binding merger agreement with CF. Our only impediment is CF’s refusal to act – contrary to your wishes.

AGRIUM’S OFFER IS FINANCIALLY COMPELLING, BY ANY METRIC
1. We are offering a far higher multiple than CF has ever traded.
Our latest offer implies a 2010E ‘owned’ EBITDA multiple of 6.8x, a multiple far greater than CF has ever traded previously. Agrium has historically traded at a premium to CF when using average forward ‘owned’ EBITDA multiples 2 through January 15, 2009, the day before CF made its offer for Terra.
We specifically structured our deal so that our mixed consideration of both stock and cash allows CF stockholders to elect to benefit from both Agrium’s historically strong valuation, upside to the commodity cycle and participation in approximately $150 million of estimated annual operating synergies, while receiving immediate value.

2. CF’s unaffected share price is far below our offer and even current trading levels.
CF’s stock dropped precipitously in the days following Agrium’s revised offer. We believe this occurred for one reason: the market’s recognition that the CF board has refused to listen to or act on its own shareholders’ views on value. If Agrium withdraws, we believe the stock will fall even further. This highlights the importance of sending an unambiguous message by tendering to this offer.
In fact, using the objective approach set forth by RiskMetrics Group3, CF’s unaffected stock price is in the $66 to $70 range. Our offer is $97.47 based on yesterday’s close, with significant upside potential.

3. CF/Agrium: A better combination than CF/Terra across all criteria.
The strategic combination of Agrium and CF would yield greater pro forma 2010E EBITDA4 ($2.3 billion vs. $1.3 billion), a more robust forward-trading multiple 5 (5.1x vs. 4.3x) and a more diversified revenue stream with less exposure to volatile commodities than CF’s proposed acquisition of Terra.

Topics:

Leave a Reply

Crop Inputs Stories
Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
MicronutrientsMicronutrients Going Macro
September 9, 2014
Between 2014’s fantastic growing conditions and a heightened awareness on plant nutrition, the major players in micronutrients are gearing up for another big year. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
FungicidesSudden Death Syndrome, Brown Stem Rot Reported In Indiana Soybeans
September 3, 2014
Farmers and retailers should be watching for symptoms of these two diseases over the next few weeks as they are best managed through preventative methods. Read More
Top 100 Articles
CropLife 100Pinnacle Expands Sanders Brand In The South
February 27, 2015
Pinnacle has acquired Hopkins Seed and Chemical in Qulin, MO, which expands the company's Sanders brand to nine Southern states. Read More
CropLife 100Pinnacle Launches New Providence Agriculture Location In Indiana
February 27, 2015
Pinnacle Agriculture Holdings — ranked No. 6 on the CropLife 100 — has established a new retail location in New Castle, IN, which will operate as part of Pinnacle's Providence Agriculture brand. Read More
CropLife 100Cooperative CHS Returns $518 Million To Owners
February 23, 2015
The 2015 cash return to owners is based on CHS net income of $1.1 billion, the company's second highest on record. Read More
corn field
CropLife 100The Andersons’ Humic DG Now Available In Canada
February 13, 2015
The Andersons, Inc. Turf & Specialty Group has announced its Humic DG product is now available to customers in the Canadian turf, agriculture and horticulture markets. Read More
Farmer on tablet
CropLife 100Southern States Co-op: An Inside Look At Our Aerial Imagery Program
February 8, 2015
Now is as good a time as any to explore the basics of what a retail aerial imagery program looks like today. Read More
CropLife 100Wilbur-Ellis Inks Satellite Imagery Agreement
February 3, 2015
Wilbur-Ellis Company has reached an agreement with Planet Labs to bring satellite imagery to the AgVerdict software platform. Read More
Latest News
CropLife 100Pinnacle Expands Sanders Brand In The South
February 27, 2015
Pinnacle has acquired Hopkins Seed and Chemical in Qulin, MO, which expands the company's Sanders brand to nine Southern states. Read More
CropLife 100Pinnacle Launches New Providence Agriculture Location I…
February 27, 2015
Pinnacle Agriculture Holdings — ranked No. 6 on the CropLife 100 — has established a new retail location in New Castle, IN, which will operate as part of Pinnacle's Providence Agriculture brand. Read More
Management2,4-D Celebrates 70 Years; GROWMARK Uses Super Bowl Ad …
February 27, 2015
Jim Gray, executive director of the 2,4-D Research Task Force, lays out planned activities to mark the chemistry’s 70th anniversary. Read More
HerbicidesUniversity Of Arkansas Flag The Technology Program Adds…
February 27, 2015
Started in 2010, the Flag the Technology program provides a visual reference for applicators to distinguish between fields planted with different herbicide-tolerant trait technologies. Read More
Luckey Farmers, Inc.’s Berkey Farm Center
Industry NewsLuckey Farmers’ Berkey Branch Certified In 4R Nut…
February 26, 2015
The 4R Nutrient Stewardship Certification Program has announced Luckey Farmers Inc.’s Berkey Farm Center in northwest Ohio has been added to its growing list of nutrient service providers to achieve certified status. Read More
Crop InputsWinField Unveiling NutriVision Technology, Ascend Dry F…
February 24, 2015
New for 2015 are NutriVision Technology, a unique tool for monitoring in-season plant nutrient availability, and Ascend WSG plant growth regulator, a new dry formulation of Ascend plant growth regulator. Read More
FertilizerNew Formulation Of NutriSphere-N Protects High Volume U…
February 24, 2015
Verdesian Life Sciences is launching NutriSphere-N HVTM, a new polymer formulation of the proven NutriSphere-N Nitrogen Fertilizer Manager that protects high-volume applications of UAN. Read More
EquipmentIowa Ag Secretary Northey Names Hagie Water Quality Lea…
February 24, 2015
Iowa Secretary of Agriculture Bill Northey has named Hagie Mfg. as a recipient of the Secretary’s Water Quality Initiative (WQI) Leader Award. Read More
FungicidesEvito Fungicide Gives Canadian Wheat Growers New Diseas…
February 24, 2015
EVITO fungicide from Arysta LifeScience North America gives Canadian wheat and barley growers a new option for disease control. Read More
Eric SfiligojThe Commodity Classic Turns 20
February 23, 2015
Two decades in, this annual gathering of all things agriculture has become a must-see event. Read More
CropLife 100Cooperative CHS Returns $518 Million To Owners
February 23, 2015
The 2015 cash return to owners is based on CHS net income of $1.1 billion, the company's second highest on record. Read More
ManagementCropLife Retail Week: On The Road Edition
February 20, 2015
Editors Paul Schrimpf and Eric Sfiligoj discuss their recent trips to the National Farm Machinery Show in Louisville and the Read More
Crop InputsLand O’Lakes Acquires FLM+ Assets
February 19, 2015
FLM+ will become a wholly owned subsidiary of Land O'Lakes, Inc., and the company will retain its employee base after closing of the deal, which is scheduled for the second quarter of the year. Read More
Seed/BiotechUnited Suppliers, Stine Seed Form Marketing Alliance
February 19, 2015
The new alliance will greatly expand sales opportunities for Stine Seed with the United Supplier Seed Link Owners. Read More
Crop InputsVilsack To Deliver Commodity Classic Keynote Address
February 19, 2015
The secretary will deliver a keynote address to several thousand farmers and ag allies during the event's General Session, to be held Friday, February 27, in Phoenix, AZ. Read More
Crop InputsSoybean Storage Tips
February 19, 2015
On-farm storage of soybeans requires some special considerations compared to corn. Read More
Monsanto Sign
Crop InputsBioAg Alliance Delivers Promising Field Trial Results
February 19, 2015
In its first full year of field trials, the BioAg Alliance reported that the top 10 microbial strains tested in corn and soybeans showed very promising results. Read More
National Farm Machinery Show overview
EquipmentNational Farm Machinery Show Attendance Up By 16K
February 18, 2015
The 2015 event saw the second highest attendance total of all time as 310,589 attendees that included exhibitors and agribusiness professionals traveled to the Kentucky Exposition Center to participate in the nation’s largest indoor ag trade show. Read More