Barring some sudden enthusiasm from the board of U.S. fertilizer firm CF Industries, Agrium’s May 11 bid to buy up CF’s shares is its final offer.
If the Calgary-based fertilizer and ag retail giant doesn’t get “a compelling majority” of shares tendered to its most recent offer, “we will conclude we do not have sufficient support from CF stockholders and will walk from the transaction,” Agrium CEO Mike Wilson said in a release Wednesday.
On the hunt for Chicago-based CF since late February, Agrium last month raised its offer to a cash-and-stock combination worth an estimated US$4.1 billion, in the form of US$40 plus one Agrium common share for each CF share. That’s up US$5 cash from Agrium’s previous offer.
Based on Agrium’s June 2 closing stock price, the offer is worth just over $89 per share, the company said.
“Agrium is prepared to execute immediately a fully financed, binding merger agreement but CF stockholders must send an unambiguous message to CF’s board by tendering their shares into our offer,” Wilson said. “If we receive a compelling majority of shares tendered into our offer, we will continue to press CF to engage.”
Agrium’s unsolicited bid is “far superior to any alternative articulated by CF,” Wilson said, including remaining a stand-alone company or CF’s current unsolicited takeover bid for U.S. rival Terra Industries. CF’s board previously stated it sees Agrium’s play as interference in the Terra bid.
Iowa-based Terra’s board has been rejecting CF’s overtures since January. CF on May 22 extended its bid, a share swap worth about US$30.50, until June 26.
Agrium, whose bid has been underwritten by RBC and Scotiabank, also recently extended the deadline on its offer for CF to midnight ET, June 22.
“We note that the majority of long-term stockholders — including Growmark, the stockholder most familiar with CF — have recently sold CF shares at prices well below our offer,” Agrium’s Wilson said Wednesday.
“In fact, 14 of CF’s top 15 stockholders prior to our bid in February have dramatically reduced their holdings, a clear signal that they disagree with CF’s views on valuation and are voting with their feet.”
Canadian assets at stake in the bids for CF and Terra include CF’s major nitrogen fertilizer facility at Medicine Hat, Alta., and Terra’s N fertilizer plant at Courtright, Ont.