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

Valent David Nothmann
Crop InputsValent Names David Nothmann Vice President Of Marketing
June 27, 2016
Valent U.S.A. Corp. has announced the appointment of David Nothmann as vice president of marketing. Nothmann will be responsible for Read More
AdjuvantsPrecision Laboratories Introduces Intact Xtra For Use With Dicamba-Based Herbicides
June 27, 2016
Precision Laboratories announces the launch of Intact Xtra, an adjuvant designed for applicators who want to maximize spray applications and Read More
Crop InputsFields of the Future: WinField Doubles Down with Agri-Education Center Investment (w/Photo Gallery)
June 16, 2016
Land O’Lakes, Inc., joined by Agriculture Secretary Tom Vilsack, today will host Fields of the Future, a live broadcast about Read More
Bayer sign
Crop InputsMonsanto Turns Back Bayer Again
June 14, 2016
Bayer AG’s bid to buy Monsanto Co. for more than $60 billion has hit an impasse that could pose a Read More
Trending Articles
The Andersons Waterloo
ManagementFirst Indiana Facility Certified Under 4R Nutrient Stewardship Certification Program
June 27, 2016
The 4R Nutrient Stewardship Certification Program has announced that The Andersons, Inc.’s Waterloo, IN, facility has been added to its Read More
Food IT
Industry NewsCalifornia Event Will Mix Ag And Tech Professionals To Explore IT Solutions
June 20, 2016
Silicon Valley is hot on agriculture, and an upcoming event in California will bring together the food and tech industries Read More
Monsanto Luling Plant
Eric SfiligojWhat’s Next For Monsanto?
May 31, 2016
For the folks at Monsanto’s headquarters in St. Louis, MO, it has been an eventful few weeks. Back on May Read More
Soybean Plant closeup
Industry NewsMonsanto Rejects Bayer Bid; Open To More Talks
May 25, 2016
Monsanto Co, the world’s largest seed company, turned down Bayer AG’s $62 billion acquisition bid as “incomplete and financially inadequate” Read More
Eric SfiligojPity The Monsanto Haters
May 23, 2016
An old saying goes thus: “Be careful what you wish for. You just might get it.” Given current events, there Read More
Monsanto Luling Plant
Crop InputsReport: Bayer Eyeing Monsanto For Possible Mega-Merger
May 16, 2016
Bayer AG is exploring a potential bid for U.S. competitor Monsanto Co. in a deal that would create the world’s Read More
Latest News
Industry NewsCompass Minerals Names Protassium+ Sales Director
June 28, 2016
Compass Minerals, the producer of Protassium+ sulfate of potash, has named Scott Johnson director of sales for Protassium+ North America. Read More
Eric SfiligojThe British Leave Vote Impact On EU Agriculture
June 27, 2016
Like virtually everyone else in the world this past week, I’ve watched the global reaction to Britain’s vote to exit Read More
Valent David Nothmann
Crop InputsValent Names David Nothmann Vice President Of Marketing
June 27, 2016
Valent U.S.A. Corp. has announced the appointment of David Nothmann as vice president of marketing. Nothmann will be responsible for Read More
The Andersons Waterloo
ManagementFirst Indiana Facility Certified Under 4R Nutrient Stew…
June 27, 2016
The 4R Nutrient Stewardship Certification Program has announced that The Andersons, Inc.’s Waterloo, IN, facility has been added to its Read More
CropLife 100BRANDT Contributes To Mayo Clinic
June 27, 2016
BRANDT, a leading agriculture retailer and manufacturer of specialty agriculture products, has pledged a sizable donation to the Mayo Clinic Read More
ManagementReport: U.S. Farmland Values On Average Continue Gradua…
June 27, 2016
Land price movement has been in the forefront for farmers, landowners, lenders and land brokers for a decade now during Read More
AdjuvantsPrecision Laboratories Introduces Intact Xtra For Use W…
June 27, 2016
Precision Laboratories announces the launch of Intact Xtra, an adjuvant designed for applicators who want to maximize spray applications and Read More
Key Cooperative’s new liquid fertilizer, crop chemical, and seed facility in Grinnell, IA stores 1.5 million gallons of liquid fertilizer and 120,000 gallons of crop chemicals.
Retail FacilitiesKey Cooperative Facility Features The Latest In Murray …
June 27, 2016
When Key Cooperative wanted to improve the overall efficiency at its new state-of-the-art facility in Grinnell, IA, it turned to Read More
Allen Summers Asmark Institute PSM Training
EmployeesAsmark Institute Sponsors 25 ResponsibleAg Auditor Trai…
June 21, 2016
The Asmark Institute has announced plans to provide 25 scholarships through their affiliated State fertilizer and agrichemical associations to help encourage Read More
Kennebec Elevator
CropLife 100Wheat Growers Celebrates Kennebec Elevator Grand Openin…
June 21, 2016
Over 250 patrons and guests were on hand to celebrate Wheat Growers’ Kennebec Elevator grand opening. South Dakota Secretary of Read More
Land O Lakes
Industry NewsLand O’Lakes To Acquire Ceres
June 20, 2016
Land O’ Lakes, Inc. and Ceres, Inc. have announced that they have signed a definitive merger agreement under which Land O’Lakes Read More
Food IT
Industry NewsCalifornia Event Will Mix Ag And Tech Professionals To …
June 20, 2016
Silicon Valley is hot on agriculture, and an upcoming event in California will bring together the food and tech industries Read More
LegislationVilsack Christens WinField Crop Adventure, Talks Monsan…
June 17, 2016
The WinField Crop Adventure grand opening ceremonies at Fair Oaks Farms (near Winemac, IN) welcomed USDA Secretary of Agriculture Tom Read More
Crop InputsFields of the Future: WinField Doubles Down with Agri-E…
June 16, 2016
Land O’Lakes, Inc., joined by Agriculture Secretary Tom Vilsack, today will host Fields of the Future, a live broadcast about Read More
Bayer sign
Crop InputsMonsanto Turns Back Bayer Again
June 14, 2016
Bayer AG’s bid to buy Monsanto Co. for more than $60 billion has hit an impasse that could pose a Read More
Young Corn Field
Crop NutritionNext Generation Of Nitrogen Efficiency Technology Conve…
June 13, 2016
Commodity price projections indicate farmers will continue to face tight margins again this year. Delivering higher yields and more bushels Read More
Industry NewsLa Crosse Seed Acquires Cover Crop Solutions Brand
June 10, 2016
La Crosse Seed announces that it is the new and exclusive owner of the entire family of brands of Cover Read More