CALGARY — Agrium Inc.’s (TSX:AGU) months-long quest to acquire CF Industries Holdings Inc. (NYSE:CF) failed to reach a decisive end Tuesday, with just under two-thirds of the U.S. target’s shareholders supporting the Calgary-based company’s offer.
Agrium said 62 per cent of CF shareholders tendered their stock to the nearly US$4-billion deal, which expired Monday at midnight but has been extended to July 22.
Despite coming in just shy of the two-thirds needed under Agrium’s offer, the results were “extraordinarily strong,” Agrium CEO Mike Wilson said in a statement.
“CF stockholders have sent a resounding message to CF’s board that they support Agrium’s offer,” Wilson said.
Agrium is offering $40 in cash plus one Agrium share for each CF share, a bid it has called its “best and final price” unless CF has a change of heart and is willing to sit down and talk terms.
Agrium’s hostile pursuit of CF has been consistently rebuffed by directors of the Deerfield, Ill.-based fertilizer producer and distributor, despite two increases to the bid.
On Tuesday that company showed no signs of backing down.
“Contrary to Agrium’s assertions, the tender offer results do not change the facts that Agrium’s offer substantially undervalues CF Industries, our shareholders do not support the price in the offer, and the offer has significant regulatory issues,” said CF chief executive officer Stephen Wilson.
Among CF’s objections to the deal is its contention that Agrium is making the offer to quash CF’s own hostile takeover bid for rival Terra Industries (NYSE:TRA).
For its part, Agrium says the deal is a 60 per cent premium to CF’s closing stock price on Feb. 24, the day before the first bid was announced.
UBS Investment Research analyst Brian MacArthur said the ball is in the CF board’s court.
“We believe the key to any successful deal rests with CF’s board, and that Agrium cannot legally compel CF to negotiate. Should CF’s board reject Agrium’s overtures, CF could remain independent,” he wrote in a note to clients Tuesday.
CF risks suffering a stock-drop of between $6 and $12 per share should Agrium walk away from its bid, MacArthur added.
Agrium is a major retail supplier of agricultural products and services in both North and South America and a leading global producer and marketer of fertilizer and industrial products.
The company took over U.S. agricultural products distributor Royster Clark for $590 million in February 2006. Last year, it acquired UAP Holdings for $2.65 billion, making the Canadian company the largest agriculture inputs retailer in North America.
Agrium shares rose about three per cent to C$46.26 on the Toronto Stock Exchange and to US$40.20 on the New York Stock Exchange around midday Tuesday.
CF shares gained about 4.4 per cent to $72.35 in New York.