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Agrium ups ante in CF takeover bid

Canadian fertilizer and ag retail giant Agrium has piled on more sugar in its hostile play for U.S. fertilizer firm CF Industries.

Calgary-based Agrium on Monday announced it’s “substantially increasing” its cash-and-stock offer for all outstanding shares in Chicago-based CF to a value of about US$85.20 per share.

The raise comes as a US$5-per-share increase in the cash portion of Agrium’s offer, to US$40 from $35, along with one common share of Agrium for each CF share.

“Given an increase of over 25 per cent in the cash component since our initial offer, we believe more than ever that our bid delivers far superior value for CF stockholders compared with any alternatives articulated by CF,” Agrium CEO Mike Wilson said Monday, “including remaining independent or paying a premium for Terra Industries.”

Since mid-March, CF, still in the midst of its own hostile bid for Iowa-based rival Terra Industries, has been brushing off Agrium’s overtures, describing them as an attempt to interfere in its play for Terra.

“As part of our continuing efforts to negotiate a mutually beneficial transaction with CF, we again attempted in recent days to meet with CF’s management and financial advisors to discuss a transaction at a substantially higher price,” Wilson said.

“CF has repeatedly rebuffed our efforts to meet, leaving us no choice but to take our increased offer directly to CF stockholders. It is time for CF stockholders to tell the CF board to come to the table.”

For its part, CF Industries’ board of directors said in a statement Monday that it will “evaluate the revised proposal carefully in the context of CF Industries’ strategic plans to create shareholder value,” such as the Terra bid.

Agrium reiterated that the cash portion of its bid is coming out of its own resources plus “committed financing” underwritten by RBC and Scotiabank.

It also said it has extended the expiration date on its new offer to midnight ET, June 15, from its previous deadline of May 19. About 1.27 million CF shares had been tendered to its previous offer as of midnight May 8.

Agrium said its new offer represents a premium of 53 per cent to CF’s closing price Fev. 24, and of 68 per cent to CF stock’s previous 30-day volume weighted average price.

Canadian assets are at stake in both takeover bids, including CF’s major nitrogen plant at Medicine Hat, Alta., and Terra’s N plant at Courtright, Ont.

CF on April 24 extended the deadline for its all-stock offer to Terra shareholders, which it pegged at US$30.50 per Terra share. CF’s offer, previously set to end May 15, will now expire June 12.

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