Hoping to soon have “clarity” for shareholders in U.S. fertilizer firm CF Industries, Canadian fertilizer and ag retail giant Agrium has once again extended its unsolicited takeover bid for CF shares.
Calgary-based Agrium said Monday it would extend its offer’s expiration date to midnight ET on Oct. 22. The offer had been extended last month to end midnight Tuesday (Sept. 22).
Agrium, which has had a bid in play for CF since February, raised its offer May 11 to a cash-and-stock bid of US$40 plus one Agrium share for each CF share.
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CF’s board has so far resisted all Agrium’s overtures, saying they undervalue the Chicago-based fertilizer firm, whose Canadian assets include a major nitrogen fertilizer plant at Medicine Hat, Alta.
“Despite the fact that CF continues to ignore a clear mandate to conclude a transaction, we will continue to press CF to execute a mutually beneficial merger agreement,” Agrium CEO Mike Wilson reiterated in a release Monday.
“Our offer remains far superior to any alternative articulated by CF, including remaining independent or paying a premium for Terra.”
“Terra” refers to Terra Industries, an Iowa-based fertilizer firm which has resisted an unrelated hostile takeover bid by CF since January. Terra’s manufacturing assets include a nitrogen facility at Courtright, Ont.
Last Friday afternoon, about 11.2 million shares of CF had been tendered into Agrium’s offer. That’s up from about 10.5 million Aug. 14 but well down from 30.14 million, good for a stake of about 62 per cent of CF stock, that were committed to the deal back on June 23.
Asked Monday whether the company has an end zone in sight for its offer, Agrium investor relations manager Todd Coakwell noted that Terra Industries’ annual general meeting was scheduled for Nov. 19.
“You can expect that there will clarity to come, more than likely before (Nov. 19),” he said, noting it’s important for Agrium and CF shareholders alike to have clarity by that time.
“No compelling logic”
Agrium’s proposed deal is also still being reviewed by competition regulators on both side of the border, Coakwell noted, adding that the company doesn’t expect any impediments to arise from that process.
Terra said Aug. 31 it planned to hold its annual meeting Nov. 19, but in a Sept. 8 letter to shareholders it lists its annual meeting date as Nov. 20.
The Sept. 8 letter, by Terra CEO Michael Bennett and chairman Henry Slack, reiterated that its board sees “no compelling industrial logic behind CF’s proposal and we are convinced that our shareholders agree.”
Furthermore, they wrote, “we continue to believe that CF shareholders are unlikely to approve a transaction with Terra if given the alternative of the Agrium bid.”
CF, they wrote, “has repeatedly asserted that it previously restructured its offer for Terra to eliminate a CF shareholder vote to address our concerns, (but) the more obvious explanation is that if CF shareholders were given a choice they would prefer a transaction with Agrium. This view is borne out by the very significant tender by CF shareholders into the Agrium offer.”
