Agrium makes "final" offer for CF Industries

By The Associated Press

The fertilizer industry's unfriendly takeover wrangling continued Thursday as Agrium Inc. sent letters to shareholders of competitor CF Industries Holdings Inc., encouraging them to take its "final" buyout offer.

Agrium, based in Calgary, Alberta, asked CF Industries shareholders to tender their shares by Nov. 18 "to send a clear message to the CF board that you want to receive a premium, not pay one."

Agrium said it will consider all options including litigation and nominating a slate of directors to the CF Industries board if it receives resounding shareholder support.

Agrium said its most recent offer of $45 cash and one share of Agrium stock for each CF share amounts to $97.47 per share, or about $4.9 billion, based on closing share prices of Nov. 11.

The company said the revised offer is a 106 percent premium to CF Industries' Jan. 15 price and 75 percent to the share price on Feb. 24, the day before Agrium announced its first proposal.

Since February, the company said it has increased its offer 36 percent.

CF Industries, based Deerfield, Ill., said last week that the Agrium bid significantly undervalues the company.

The fertilizer industry's hunger for consolidation intensified at the start of the year when company share prices had been beaten down to significantly low levels. As the economy declined, prices for agricultural commodities tumbled, forcing struggling farmers to scale back demand for fertilizer. As demand and pricing suffered, so did stocks of fertilizer companies.

Share prices have since recovered with an improving outlook for the industry, but still remain far below last year's levels.

CF started the acquisition trend in January, when it began its pursuit of another rival, Terra Industries Inc., based in Sioux City, Iowa. Terra has rejected at every turn CF Industries' attempts at a buyout.

The Agrium letter, signed by CEO Michael Wilson, said a combination of CF and Agrium is a much better combination than CF and Terra. Wilson said the Agrium-CF company would have a more diversified revenue stream and experience less exposure to volatile commodities than the CF-Terra combo.

Agrium shares rose 37 cents to close at $52.84 while shares of CF Industries rose $1.31, or 1.6 percent, to close at $80.93.