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

Trending Articles

CropLife 100Agrium To Cut 500 Jobs, Sell Some Businesses
November 11, 2014
Among the businesses Agrium will try to sell are its micronutrients and European UAN (urea-ammonium nitrate) lines. Read More
HerbicidesMonsanto, Sumitomo Chemical And Valent Extend Crop Protection Collaboration
November 10, 2014
The agreement extends their strategic partnership in Monsanto’s Roundup Ready PLUS Crop Management Solutions platform for soybeans and cotton in the U.S. Read More
FertilizerCorn Rootworm Hybrids And Potassium Uptake
November 4, 2014
To achieve successful yields, grower-customers can’t afford to cut back on their potassium use with corn rootworm hybrids, say experts. Read More
StewardshipResponsibleAg Begins Auditor Training
October 31, 2014
ResponsibleAg auditor training is now underway at the Ford B. West Center for Responsible Agriculture in Owensboro, KY. Read More
InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
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

Latest News

EquipmentAGCO Announces Operator Of The Year Finalists
November 20, 2014
Four custom applicators have been selected by AGCO Application Equipment as finalists for 2014 Operator of the Year, an honor that recognizes them as being among the top professionals in their industry throughout North America. Read More
MicronutrientsH.J. Baker Expands Tiger-Sul Business
November 20, 2014
H.J. Baker has created and filled two strategic positions in business development and sales within its Crop Performance Division. Read More
soybean field
FertilizerGeneral Mills Honors United Suppliers For Nitrogen Opti…
November 19, 2014
United Suppliers winning proposal detailed SUSTAIN, a consulting network that provides customized products and services for farmers using a needs-based system approach. Read More
EmployeesOhio AgriBusiness Association Awards $25,000 In Scholar…
November 19, 2014
Each year, the Ohio AgriBusiness Association Educational Trust scholarship program awards scholarship dollars to students enrolled in an agriculture-related field attending several state colleges. Read More
ManagementServi-Tech Names New CEO
November 17, 2014
Servi-Tech has named Greg Ruehle its new president and CEO. Read More
CropLife 100Pinnacle Ag Acquires Colorado Aerial Application Outlet
November 17, 2014
Ft. Lupton, CO-based Reck Aviation — a full-service chemical application company providing aerial crop applications of fertilizers and crop protection products — will operate as part of Pinnacle's AgOne Application Services brand. Read More
Eric SfiligojMcDonald’s Message: Biotech Crops Scarier Than Cancer
November 17, 2014
Despite their potential health benefits, one of the world’s largest potato users will pass on a new biotech offering. Read More
MicronutrientsWinField Releases 2014 NutriSolutions Results
November 14, 2014
A number of significant regional and national crop deficiency trends emerged from the 2014 WinField NutriSolutions tissue sampling program. Read More
FertilizerH.J. Baker Opens Chinese Production Lines
November 14, 2014
The occasion was the official launch of the Tiger-Sul sulphur Bentonite production line of two much anticipated fertilizer products in China, T90CR sulphur fertilizer and TZinc micronutrient enhanced sulphur fertilizer. Read More
ManagementOhio Certified Crop Adviser Program Accepting Nominatio…
November 14, 2014
The award recognizes an individual who delivers exceptional customer service for farmer clients in nutrient management, soil and water management, integrated pest management and crop production in Ohio. Read More
HerbicidesSyngenta Announces Acuron Trial Plot Results
November 14, 2014
Acuron was tested at 167 trial locations across 35 states. Trials included 95 Syngenta locations, 54 university locations and 18 distributor locations. Read More
Crop InputsVerdesian Expands Sales Force
November 13, 2014
The new sales representatives will work with growers, retail partners and distributors to oversee technical training and product education. Read More
EquipmentAGCO Raises $100K For Wounded Warrior Project
November 13, 2014
AGCO Corp. partnered with local AGCO dealers across the U.S. and Canada to raise nearly $100,000 in support of wounded service veterans. Read More
HerbicidesDow AgroSciences Announces Launch Of Enlist Duo Herbici…
November 12, 2014
It will be launched in conjunction with a stewarded introduction of Enlist corn, and seed production of Enlist soybeans in 2015. Read More
FertilizerH.J. Baker Expands Tiger-Sul Business
November 12, 2014
Agricultural firm H.J. Baker has created and filled two strategic positions in business development and sales within its Crop Performance Division. Read More
Blenders13 Fertilizer Blenders For 2015
November 12, 2014
Dealers can find a fertilizer blender to deliver any speed, volume and custom mix they want. Read More
CropLife 100Wilbur-Ellis Vice President Receives Honorary FFA Award
November 11, 2014
Jim Loar, vice president of operations of Wilbur-Ellis’ Agribusiness Division, was awarded the Honorary American FFA Degree at the 2014 National FFA Convention and Expo in Louisville, KY. Read More
FertilizerBASF Makes Limus Nitrogen Management Available In U.S.
November 11, 2014
Reducing ammonia losses by more than 90%, Limus nitrogen management has demonstrated increased crop yields on average of 6%, according to 2013 replicated research. Read More