DOW JONES NEWSWIRES
Agrium Inc. (AGU) said Monday that its raised $4.18 billion
offer to buy rival fertilizer maker CF Industries Holdings Inc.
(CF), which was rejected late Friday, provides more value to
shareholders that CF's proposed buy of smaller U.S. Terra
Industries Inc. (TRA).
The jockeying for position comes as fertilizer producers look to
take advantage of the drop in sector stock prices since last summer
to buy up production capacity ahead of an expected rebound in
prices. The three-way tussle, now in its fourth month, has seen CF
reject Agrium's approaches, and cast them as an effort to disrupt
its own pursuit of Terra and prevent consolidation in the wholesale
fertilizer sector.
Agrium, the largest of the three companies by revenue, last week
boosted the cash portion of its offer for CF to $40 a share from
its previously sweetened bid of $35. The stock portion of one share
of Agrium to one share of CF remains the same.
All three companies' shares were unchanged from Friday's close
in premarket trading. Agrium's shares closed at $48.18, CF's were
at $79.75 and Terra's ended at $28.26.
Agrium Chief Executive Mike Wilson said Monday the sweetened
offer, which is a 59% premium to CF's closing share price on Feb.
24, the day before its initial offer was made, "delivers more value
to CF stockholders than any of the strategic alternatives
articulated by CF, including remaining independent or acquiring
Terra Industries."
Agrium has repeatedly urged CF shareholders to support its
offer. It said last week that as of midnight May 8, 1.3 million of
CF's 49.1 million shares outstanding had been tendered.
CF's board rejected the offer Friday. Chairman and Chief
Executive Stephen R. Wilson said Agrium hasn't significantly
changed the terms of its offer, which the board believes continues
to "substantially undervalue" CF.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com