CALGARY — CF Industries Holdings Inc. (NYSE:CF) again spurned a takeover bid from fertilizer giant Agrium Inc. (TSX:AGU), which last week sweetened its offer for the U.S. nitrogen producer.
Deerfield, Ill.-based CF called Agrium’s cash-and-stock offer Monday “grossly inadequate” and “not in the best interest as shareholders,” even after the cash portion of the deal was increased more than 10 per cent on Friday to US$35 per share.
Calgary-based Agrium also offered one of its common shares for each CF share.
Based on Agrium’s closing share price prior to the takeover offer, the value of the deal rises from $72 per share to $75.30 per share.
CF vowed to keep pursuing its hostile bid for Sioux City, Iowa-based Terra Industries Inc. (NYSE:TRA), which has rejected CF’s overtures.
Agrium has argued that a CF-Terra combination isn’t in the best interest of shareholders and is making its offer conditional on CF dropping its plans.
But CF chief executive Stephen Wilson said Monday that “we strongly believe that continuing to pursue our long-term strategy, including our proposed business combination with Terra Industries, is the best way to do so.”
When Agrium announced it was raising the cash portion of the offer Friday, it suggested that it may further sweeten the deal if CF could demonstrate how more value would be created.
On an analyst conference call Friday, Agrium CEO Mike Wilson declined to say how much higher Agrium would go, but dismissed CF’s view that a $100-per-share bid would be accretive to Agrium in 2010.
“The $100 per share is la-la land,” said Dundee Securities analyst Richard Kelertas.
“We believe that Agrium will pay anywhere from 10 to 15 per cent more than their initial offer of $72 and then if they cannot get CF they will walk away . . . I know Mike Wilson, I know the discipline and I also know that he’s not going to play a cat-and-mouse game for very much longer.”
Agrium announced Friday that it has filed materials with the U.S. securities regulator, urging shareholders to withhold their votes for board nominees at CF’s annual meeting April 21. Its tender offer to CF shareholders expires May 19.