Agrium Ends Yearlong Attempt to Acquire CF Industries (Update2)
March 11, 2010, 8:19 PM EST(Adds fund manager comment in sixth paragraph.)
By Christopher Donville
March 11 (Bloomberg) -- Agrium Inc. will let its $5.43 billion offer for CF Industries Holdings Inc. expire and won’t try to elect nominees to CF’s board, ending a yearlong attempt to take over the rival fertilizer producer.
The cash-and-stock offer to acquire Deerfield, Illinois- based CF will be allowed to expire on March 22, Calgary-based Agrium said today in a statement.
Agrium had sought to buy CF since February 2009 to boost its capacity to make nitrogen-based crop nutrients, while CF was attempting to acquire Terra Industries Inc. CF rebuffed Agrium’s repeated advances, calling them inadequate, while insisting that its own attempt to purchase Terra was more compelling. At stake in the battle was whether Agrium or CF would be the world’s second-largest publicly traded maker of nitrogen-based fertilizers after Norway’s Yara International ASA.
“It is unfortunate we could not conclude this transaction, given the strong support shown by both CF and Agrium shareholders,” Agrium Chief Executive Officer Michael Wilson said in the statement.
Agrium’s retreat focuses attention on Oslo-based Yara, which is weighing whether to counter CF’s latest $4.71 billion offer for Terra or walk away from an agreement to acquire the Sioux City, Iowa-based company. Yara’s withdrawal would clear the way for CF to buy Terra.
“It really sounds like CF’s acquisition of Terra is going to happen,” Malcolm E. Polley, chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania, said today in a phone interview. Polley manages about $1 billion, including shares of CF.
Terry Huch, a CF spokesman, declined to comment on Agrium’s decision to give up.
Nitrogen Fertilizer
“This is a positive for Agrium because I don’t think its investors really wanted it to get much deeper into nitrogen fertilizer,” Edlain Rodriguez, an analyst at Broadpoint AmTech in New York, said today by phone.
“Agrium’s investors like the company’s potash expansion and its moves in farm retail,” Rodriguez said. “In the end, buying CF would have cost too much money.”
Agrium will continue to focus on “significant growth opportunities” in agriculture, Wilson said in the statement.
Richard Downey, a spokesman for Agrium, didn’t immediately return a call from Bloomberg for comment.
CF fell $4.66, or 4.6 percent, to $95.95 at 7:26 p.m. in trading after the official close of the New York Stock Exchange. Agrium’s U.S. shares rose $3.12, or 4.7 percent, to $69.90.
--Editors: James Langford,
To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net
To contact the editor responsible for this story: Kevin Miller at kmiller@bloomberg.net
