CF Industries, Agrium Continue Volleying

CF Industries Holdings, Inc. has made a decision about Agrium Inc.’s latest acquisition offer.

CF Industries announced on May 15 that its board of directors has rejected Agrium Inc.’s latest revised offer to acquire all outstanding shares of CF Industries. CF Industries has repeatedly rejected each offer from Agrium since Agrium’s first proposal on Feb. 25.

Agrium’s May 11 revision to its offer added $5.00 in cash per share, which it noted at that time to be a 14.3 percent iincrease and an increase of more than 25 percent in the cash component since its initial offer. In rejecting the proposal, CF Industries describes the offer as “only $0.58 above the $4.42 per share increase in CF Industries’ cash position during the first quarter of this year. Since Feb. 24, 2009, the day before Agrium made its initial offer, the overall stock market is up significantly, and there has been an increase of 36.9 percent in the average stock price for the peer group. With the latest revised offer, the nominal value of Agrium’s offer has increased by only 22.5 percent since it was first made," according to a company news release.

“Our board and management team are committed to providing superior value to our stockholders,” says Stephen R. Wilson, chairman, president and CEO of CF Industries. “Agrium has not significantly changed the terms of its offer since it was first made and the board believes that the offer continues to substantially undervalue CF Industries. The board concluded that the continued execution of its strategic plan, including the company’s proposed business combination with Terra Industries, will deliver superior value to CF Industries stockholders.”

On May 18, Agrium Inc. issued a response "to the rejection by CF Industries Holdings, Inc. of Agrium’s further increased offer to acquire all of the outstanding shares of CF for $40 in cash plus one common share of Agrium for each CF share. The offer is valued at $88.18 per CF share based on Agrium’s closing stock price on May 15, 2009," in a statement.

"The inescapable fact is that Agrium’s offer, which provides a premium of nearly 60 percent to CF’s share price on the day prior to our initial offer, delivers more value to CF stockholders than any of the strategic alternatives articulated by CF, including remaining independent or acquiring Terra Industries, says Mike Wison, Agrium’s president and CEO. "CF’s unsupported assertions to the contrary do not change this reality. The fact that CF will not engage with us reinforces our belief that, left on its own, CF will not act in the best interests of its stockholders. It’s now up to CF stockholders to protect their own interests by demanding that CF come to the table to negotiate a mutually beneficial merger agreement with Agrium."

Agrium’s offer expires at midnight Eastern time June 15.

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