CF Industries Holdings Inc. (CF:US), the fertilizer producer that’s been criticized by activist hedge fund Third Point LLC for its dividend payments, jumped the most in four months after saying it’s considering a master-limited partnership.
CF, the largest U.S. nitrogen-fertilizer maker, rose 11 percent to $237.07 at the close in New York, the biggest gain since July 29.
The company is in talks with financial advisers to evaluate an MLP and “MLP-like structures along with other financial options,” Deerfield, Illinois-based CF said today in a filing containing presentation slides.
MLPs are structured to pay cash to unitholders, shielding the partnership from corporate taxes. Many MLPs are energy-related because the U.S. tax code limits the structure primarily to natural-resources businesses. CF uses natural gas to make nitrogen fertilizer.
Third Point, run by activist investor Dan Loeb, urged CF in July to pay a bigger dividend. CF was trading at an “unwarranted discount” to its fertilizer and chemical peers, according to Third Point’s second-quarter letter to its investors. In October, CF raised its dividend by 150 percent.
Third Point holds a 1.5 percent stake in CF, according to data compiled by Bloomberg.
CF also said in the presentation today that it will “continue to evaluate increasing” the dividend over time.
Susan Fisher, a spokeswoman for CF, didn’t immediately respond to a voicemail and e-mail seeking further comment.
“CF is outlining positive steps sooner than we expected,” Matthew Korn, a New York-based analyst for Barclays Plc, who recommends buying the shares, said in a report today.
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