CF board spurns Agrium’s new offer

REVISED, May 18 — The board of U.S. fertilizer firm CF Industries says it can generate more value for its shareholders than Agrium now has on the table.

The Calgary-based fertilizer and ag retail giant on May 11 raised its cash-and-stock offer for the Chicago-area company to to a value of over US$88 per share, in the form of $40 cash and one Agrium common share for each CF share.

Agrium’s increase of $5 cash per share brings the total value of its offer to about $4.1 billion (all figures US$).

But CF’s board announced Friday that it rejects Agrium’s new offer, saying it “continues to substantially undervalue the company and is not in the best interests of CF Industries and its stockholders.”

CF, whose Canadian holdings include a “world-scale” nitrogen fertilizer plant at Medicine Hat, Alta., says Agrium’s new offer is “only 58 cents above the $4.42 per share increase in CF Industries’ cash position during the first quarter of this year.

“With the latest revised offer, the nominal value of Agrium’s offer has increased by only 22.5 per cent since it was first made,” the company said.

“The board concluded that the continued execution of its strategic plan, including the company’s proposed business combination with Terra Industries, will deliver superior value to CF Industries stockholders,” CF CEO Stephen Wilson said Friday in a release.

CF has previously blasted Agrium’s overtures, alleging they’re an attempt to interfere in CF’s own unsolicited takeover bid for another fertilizer firm, Iowa-based Terra Industries, whose holdings include a major N plant at Courtright, Ont.

In a separate release Monday, Agrium CEO Mike Wilson reiterated the company’s stance that its offer for CF “delivers more value to CF stockholders than any of the strategic alternatives articulated by CF, including remaining independent or acquiring Terra Industries. CF’s unsupported assertions to the contrary do not change this reality.”

Agrium’s Wilson said the CF board’s latest refusal “reinforces our belief that, left on its own, CF will not act in the best interests of its stockholders. It’s now up to CF stockholders to protect their own interests by demanding that CF come to the table to negotiate a mutually beneficial merger agreement with Agrium.”



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