Agrium denies antitrust issues in CF bid

U.S. fertilizer firm CF Industries is “misleading” shareholders on the likelihood of antitrust issues arising from a takeover bid by Agrium, the Canadian fertilizer giant says.

“CF has seriously misrepresented the status and character of the antitrust review of Agrium’s proposed acquisition of CF, further supporting our concerns that CF is not acting in the best interests of its stockholders,” the Calgary company said in a release Thursday.

Agrium and its lawyers have been in “close communication” with antitrust authorities in Canada and the U.S. and “are confident that there are no material impediments to closing an Agrium/CF transaction, nor are there expected to be any material delays in closing as a result of regulatory review,” Agrium said.

The waiting period under “relevant Canadian law” expired March 23, Agrium noted, and while Agrium and its antitrust counsel are still in talks with the federal Competition Bureau, Agrium’s antitrust lawyers are “of the view that no further Canadian competition approvals under Canadian law are required to legally close the transaction today.”

The largest Canadian asset at stake in Agrium’s unsolicited takeover bid for CF is the Chicago-area company’s major nitrogen fertilizer plant at Medicine Hat, Alta.

South of the border, Agrium said, the company will re-file its pre-merger notification form required under the U.S. Hart-Scott-Rodino Act with that country’s Federal Trade Commission (FTC), “once it completes its ongoing discussions with the FTC, which the company believes can be satisfactorily concluded in short order.”

Agrium’s statement Thursday follows a release from CF on Tuesday, in which CF CEO Stephen Wilson said that “in addition to the clear inadequacy of Agrium’s offer, our board continues to be concerned with a number of risks associated with a potential combination with Agrium, including those related to value and timing of any transaction as a result of the ongoing regulatory review and potential remedies that may be required.”

Agrium said it believes CF’s “misstatements on this and other matters provides even more rationale for CF stockholders to tender their shares into the Agrium offer and send a strong message to the CF board.”

The Calgary firm said its offer is “far superior to any alternative articulated by CF, including remaining independent or paying a premium for Terra. Tendering shares into Agrium’s exchange offer is the only way for CF stockholders to send an unambiguous message to CF’s board that you (stockholders) will not tolerate entrenchment.”

“Terra” refers to Terra Industries, an Iowa fertilizer firm that owns a major nitrogen fertilizer plant at Courtright, Ont. and is also the target of an unsolicited takeover bid by CF.

Having sought to buy CF since late February, Agrium last month raised its offer to a cash-and-stock combination worth an estimated US$4.1 billion, in the form of US$40 plus one Agrium common share for each CF share. That’s up US$5 cash from Agrium’s previous offer.

Agrium’s offer expires at midnight ET on Monday (June 22).

CF said Tuesday it “remains committed to pursuing its long-term strategy, including its proposed strategic business combination with Terra Industries.”

Terra’s board, meanwhile, has been rejecting CF’s overtures since January. CF recently extended the deadline on its bid for Terra to June 26.

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