Agrium’s Proposal Letter To CF Board Of Directors

The full text of the letter sent to the CF board of directors Feb. 25, 2009 is as follows:

Board of Directors
CF Industries Holdings, Inc.
4 Parkway North
Suite 400
Deerfield, Illinois 60015-2590
Attention: Stephen R. Wilson, Chairman, President, and Chief Executive Officer

Dear Members of the Board:

On behalf of the board of directors of Agrium Inc. (“Agrium”), I am writing to submit for your consideration a proposal to acquire CF Industries Holdings, Inc. (“CF”) in a transaction that will create significantly more value for your stockholders than your proposal to acquire Terra Industries Inc. (“Terra”).

Under the terms of our cash-and-stock proposal, Agrium would acquire 100% of the outstanding capital stock of CF (the “Proposed Transaction”) at a per share value of US$72.00 based on Agrium’s current share price. Our offer price represents a premium of 30% over CF’s closing price of $55.58 on February 24, 2009, the day before we announced our proposal, a premium of 42% over the 30-day volume-weighted average share price of CF and a premium of 52% over CF’s closing price of $47.23 on January 15, 2009, immediately prior to CF’s announced proposal to acquire Terra. Under the terms of the Proposed Transaction, stockholders of CF would be entitled to receive one Agrium common share and $31.70 in cash for each CF share. Of the approximately $3.6 billion of total consideration, 56% would be in Agrium common shares and 44% would be in cash.

As you know, our two companies had serious discussions regarding a combination prior to CF’s initial public offering in 2005. Since that time, we have closely followed CF and believe that the strategic and business logic of a combination, which was compelling then, is even stronger now. We have the highest regard for CF and its employees and believe that our companies, which share highly compatible cultures and operating philosophies, exhibit complementary strengths both geographically and in terms of our product mix.

We believe the Proposed Transaction represents full and fair value for CF’s stockholders. By offering a combination of cash and Agrium common shares at a substantial premium, and by offering your stockholders the ability to elect which form of consideration they would prefer to receive (subject to the overall limits of cash and shares comprising the aggregate consideration), the Proposed Transaction presents your stockholders with a unique opportunity for significant long-term value while providing liquidity for those of your stockholders wishing to sell their shares at an extremely attractive price.

The Proposed Transaction will create a leading global producer of agricultural inputs with the broadest product offering in the industry. Together, we can combine our respective world-class distribution networks, knowledgeable and experienced employees and first-rate production capabilities to more efficiently and effectively serve the increasingly competitive global agribusiness industry. We anticipate annual operating synergies from the combination will be approximately $150 million, substantially in excess of those contemplated in CF’s proposal to acquire Terra, and your stockholders will share in the value of those synergies through their continued ownership of the combined company.

We share your view of the benefits of creating a stronger North American-based global player that can more effectively compete on the world stage. We think it is readily apparent that the benefits you highlight with respect to a CF-Terra combination are even more compelling in a CF-Agrium combination. Through the successful execution of our growth strategy, Agrium has become a global enterprise that spans the entire agricultural value chain. A combination with Agrium would create a company with a substantially larger global footprint with a combined crop nutrient production capacity of about 17 million tonnes and touching over 20 million tonnes of crop nutrients through our wholesale, retail, and advanced technologies businesses. Our balanced portfolio of nitrogen, phosphate and potash production and distribution, coupled with our more predictable retail and advanced technologies businesses provide for a more stable company, better able to navigate the volatility of commodity cycles. Furthermore, we have a proven track record of accretive acquisitions and successful integrations.

We have thoroughly analyzed a combination of Agrium and CF and are confident such a transaction can be completed expeditiously. We have sufficient cash resources and fully underwritten financing commitments from Royal Bank of Canada and The Bank of Nova Scotia to fund the Proposed Transaction; accordingly, our proposal is not subject to any financing condition.

Our proposal is conditioned on (i) CF’s termination of its bid for Terra, (ii) negotiation of a definitive merger agreement between Agrium and CF, (iii) receipt of the necessary CF board and stockholder approvals, (iv) receipt of necessary regulatory approvals, (v) the absence of any material adverse changes to CF or its business and the continued operation of CF in the ordinary course of business and (vi) the opportunity to conduct limited confirmatory due diligence.

While we would have preferred to approach you privately, we concluded that given your recent unsolicited proposal to acquire Terra, it was imperative to act now to ensure that CF stockholders have an opportunity to consider our proposal – one that is clearly a superior alternative – prior to you reaching any agreement with Terra.

We firmly believe that our Proposed Transaction is an exceptional opportunity for our two companies and our respective stockholders, employees, customers, suppliers and the communities in which we each do business. My leadership team and I are available to meet with you, your management team and your board at any time to discuss the terms and merits of the Proposed Transaction.

This letter is not intended to create or constitute any legally binding obligation, liability or commitment by us regarding the Proposed Transaction and there will be no legally binding contract or agreement between us unless and until a definitive agreement is executed.

We look forward to hearing from you.

Sincerely yours,

 

Michael M. Wilson
President and Chief Executive Officer
Agrium Inc.
 

Topics:

Leave a Reply

Crop Inputs Stories

Radish cover crop taproot
Crop InputsSoil Health Institute, Datu Research Receive Grant To Evaluate Economic Impact Of Soil Health Practices
December 1, 2016
The Soil Health Institute (SHI) and Datu Research has announced a $626,000 grant from the Walton Family Foundation to quantify Read More
Young soybean field
HerbicidesLiquid Formulation Valor EZ Herbicide Available For 2017
December 1, 2016
Valent U.S.A. Corp. has released Valor EZ; a liquid formulation of the company’s leading herbicide, Valor. Named Valor EZ Herbicide Read More
Corn
InsecticidesMajor Review Finds Neonic Poses Low Risk To Aquatic Invertebrates
November 28, 2016
A major new ecotoxicological review and risk assessment has been published in the peer-reviewed literature and concluded that registered crop Read More
FertilizerNutrient Management, Conservation Among Topics Covered At Indiana CCA Conference
November 23, 2016
Certified crop advisers, consultants, farmers, agribusiness professionals and students will learn more about nutrient management, soil and water conservation, pest Read More
Trending Articles
Precision AgTrimble Debuts End-to-End FMIS Platform
November 28, 2016
October’s inaugural PrecisionAg Vision Conference left this author with many thoughts and things to ponder in the coming months. Probably Read More
CHS Primeland
CropLife 100The 2016 CropLife 100 Report: Reviewing The Many Bulls And Bears Impacting This Year’s Marketplace
November 28, 2016
For virtually all of 2016, the nation was wholly focused on the big Presidential election. Some folks aligned themselves with Read More
Monsanto sign
Crop InputsMissouri Governor Meets With Bayer CEO To Discuss Monsanto Merger
November 21, 2016
Missouri Gov. Jay Nixon visited Bayer AG global headquarters in Leverkusen, Germany, on November 18 to discuss the proposed Bayer-Monsanto Read More
STS16 2017
SprayersHagie Manufacturing Releases 2017 STS16 Sprayer To Market
November 16, 2016
Hagie Manufacturing LLC’s largest full season applicator is now available with enhancements for the 2017 model year. Hagie is officially Read More
Wilco
CropLife 100Valley Agronomics, Wilco-Winfield To Form New Agronomy Joint Venture
November 11, 2016
Valley Agronomics LLC, headquartered in Rupert, ID, is a joint venture between Valley Wide Cooperative and Winfield Solutions, LLC. Wilco-Winfield, Read More
FertilizerThe Fertilizer Institute Issues Statement On The U.S. Elections
November 10, 2016
The Fertilizer Institute (TFI) President Chris Jahn has issued the following statement on the results of the 2016 elections: “TFI Read More
Latest News
ManagementCorn and soy planting update; Takeaways from Climate Co…
December 2, 2016
AgriBusiness Global Editor Dave Frabotta Joins Paul Schrimpf for a discussion of global corn and soybean planting trends, and a Read More
Radish cover crop taproot
Crop InputsSoil Health Institute, Datu Research Receive Grant To E…
December 1, 2016
The Soil Health Institute (SHI) and Datu Research has announced a $626,000 grant from the Walton Family Foundation to quantify Read More
Mike Stern
Precision AgClimate Corp. CEO Talks Retailer Support For Digital Ag
December 1, 2016
CropLife Magazine’s sister publication, AgriBusiness Global, recently sat down with Mike Stern, CEO of The Climate Corp., following the Monsanto subsidiary’s Read More
ManagementAg Industry Comes Together To Address Climate Change
December 1, 2016
Addressing climate change — and more specifically, decreasing greenhouse gas emissions from agriculture — can only be achieved through collective Read More
Young soybean field
HerbicidesLiquid Formulation Valor EZ Herbicide Available For 201…
December 1, 2016
Valent U.S.A. Corp. has released Valor EZ; a liquid formulation of the company’s leading herbicide, Valor. Named Valor EZ Herbicide Read More
Key Cooperative Marcus Construction Steel Building
ManagementThe Value Of Cooperatives In Modern Agriculture
December 1, 2016
Editor’s Note: Jaxon Mullinnix of  Lone Tree, IA, was recently named the Iowa state winner of the 2017 GROWMARK essay Read More
AGCO Operator of the Year Tony Kornder
SprayersAGCO Names Tony Kornder Operator Of The Year
December 1, 2016
AGCO Corp. names Tony Kornder with Genesis Growing Solutions in Le Sueur, MN, the 11th annual Operator of the Year. Read More
Chris Henney OABA
ManagementOABA Industry Conference To Provide Outlook For Future …
November 29, 2016
The upcoming Ohio AgriBusiness Association Industry Conference is packed with widely-respected speakers and industry professionals, sharing their expertise on a Read More
Corn
InsecticidesMajor Review Finds Neonic Poses Low Risk To Aquatic Inv…
November 28, 2016
A major new ecotoxicological review and risk assessment has been published in the peer-reviewed literature and concluded that registered crop Read More
EquipmentGSI Details New Grain Drying Efficiency System for Coop…
November 28, 2016
Grain elevators and ag co-ops are always looking for ways to increase their energy efficiency to help improve profitability. For Read More
Precision AgTrimble Debuts End-to-End FMIS Platform
November 28, 2016
October’s inaugural PrecisionAg Vision Conference left this author with many thoughts and things to ponder in the coming months. Probably Read More
AGCO AgControl system
Precision AgPrecision Ag Technology: Rate Control For The Times
November 28, 2016
It’s not surprising that the need for more economical, effective application is driving the demand for the latest rate controllers Read More
ARA
Eric SfiligojTaking The Industry’s Pulse At ARA
November 28, 2016
When most of you read this particular column, many of the industry’s key folks will probably be spending at least Read More
CHS Primeland
CropLife 100The 2016 CropLife 100 Report: Reviewing The Many Bulls …
November 28, 2016
For virtually all of 2016, the nation was wholly focused on the big Presidential election. Some folks aligned themselves with Read More
FertilizerNutrient Management, Conservation Among Topics Covered …
November 23, 2016
Certified crop advisers, consultants, farmers, agribusiness professionals and students will learn more about nutrient management, soil and water conservation, pest Read More
Monsanto sign
Crop InputsMissouri Governor Meets With Bayer CEO To Discuss Monsa…
November 21, 2016
Missouri Gov. Jay Nixon visited Bayer AG global headquarters in Leverkusen, Germany, on November 18 to discuss the proposed Bayer-Monsanto Read More
Arysta LifeScience
Crop InputsArysta LifeScience Forms Alliance With Beem Biologics
November 21, 2016
As part of its recently announced strategy to become a leader in high-value, high-growth specialty market segments in the crop Read More
DuPont sign
Crop InputsDuPont To End Pension Contribution For Active Employees
November 18, 2016
DuPont will no longer contribute to active employees’ pension plans, a move that will affect the retirement of 13,000 workers, Read More