CF Industries Holdings, Inc. says that it has rejected Agrium’s third offer.
In an April 13 letter, the company outlines its stance to its stockholders.
To Our Stockholders:
Your Board of Directors and management team are committed to one thing — delivering value to stockholders.
We have proven our commitment with our performance. Since our IPO less than four years ago, our stock has risen over 350 percent, and we have been the best performing stock in our peer group. BusinessWeek just ranked CF Industries second among the 50 top performing S&P 500 companies measured over a three-year period. We returned $500 million of cash to our stockholders through an accelerated stock repurchase just this past fall, and we continue to pursue value-enhancing strategic initiatives such as our KEYTRADE investment, our project in Peru and our proposed business combination with Terra Industries.
It is because of our commitment to stockholder value that we have rejected Agrium’s offer. Agrium’s offer is grossly inadequate – nothing Agrium says changes that. We believe that, even absent Agrium’s offer, CF Industries shares would be trading well over $60 per share. Given this, Agrium’s offer with a nominal value of $75 (and lower trading value) is at a very low premium, particularly since it is almost half in cash. Recent premiums for cash transactions are nearly 90 percent and premiums for stock transactions are close to 35 percent.
If Agrium were serious about acquiring CF Industries:
- It would have made a credible offer rather than a grossly inadequate offer at a very low premium.
- It would have put up its own slate of directors for election, rather than letting the date pass for making nominations.
- It would not have acquired a toe-hold stake in CF Industries stock, the only purpose of which could be to cover the expenses of a failed acquisition attempt.
These and other actions suggest that Agrium is more interested in derailing our proposed business combination with Terra Industries than in acquiring CF Industries for anything other than a bargain price.
Your Board will continue to focus on doing what is right for our stockholders. We appreciate your continued support of our efforts to build stockholder value at CF Industries. If you have any questions or need assistance in voting your shares, please contact Innisfree M&A Inc. toll-free at 877-456-3507.
On behalf of your Board of Directors,
Stephen R. Wilson
Chairman, President and Chief Executive Officer