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Commodities & Metals

Fertilizer Makers Won’t Dance (CF, AGU, TRA)

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By Douglas A. McIntyre Updated Published
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For the second time in as many weeks, CF Industries Holdings, Inc. (NYSE:CF) has rejected an offer from Agrium Inc. (NYSE:AGU), saying that “Agrium’s offer is grossly inadequate, substantially undervalues CF Industries and is not in the best interests of CF Industries and its stockholders.”  CF repeats its claim that the Agrium offer is “opportunistic,” as well as an attempt to torpedo CF’s bid to takeover Terra Industries (NYSE:TRA).

CF has also provided additional detailed reasons for recommending that shareholders reject the Agrium offer. CF claims that “Based on daily closing prices of Agrium shares and CF Industries shares, the implied value of Agrium’s offer represented a premium of only 1.8% during the one-year period prior to February 25, 2009.”

CF also published a letter to the board of Terra that sweetened CF’s offer for Terra to $30.50/share, which CF claims is a premium of more than 85% to Terra’s stock price at the time of the original offer in January. Two weeks ago, CF bumped its premium to 70%. CF’s offer is still all stock, with no cash involved. CF notes wistfully that Terra has still not scheduled its annual shareholders meeting, which it must hold by May 15th.

In early trading, Agrium shares are up nearly 4%, CF shares are up nearly 3%, and Terra shares are up almost 5%. The overall market is up about 2% on details of the US Treasury’s plans to soak up the toxic bank assets.

Paul Ausick
March 23, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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Fertilizer Merger Wars Heating Up (TRA, CF, AGU, MOO)

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