Agrium's Bid for CF Industries Just Keeps Dragging On

Agrium gained a bit of ground this week in the marathon that is its bid for rival fertilizer maker CF Industries.

The latest development in what a New York Times blog calls ‘The Forever War’ saw CF Industries let its own hostile offer for Terra Industries (TRA) expire. Terra is another mid-teir U.S. fertilizer play. Agrium’s $3.9-billion (U.S.) bid is condition on CF dropping its planned acquisition of Terra.

However, nothing in this deal is ever simple. CF is still stalking Terra, and opted to back on a formal offer because it successfully pressured Terra into setting a date for an annual meeting, on Nov. 19. At that gathering, CF plans to push a proxy vote on its Terra offer.

Agrium (AGU) has shown that the bulk of CF Industries (CF) want to see the company sold, rather than buy Terra. But to date, Agrium has not been able to engage the CF Industries board of directors to strike a deal.

In the absence of any breakthrough – none of the players seem likely to raise their bids fom current levels – this campaign will likely stretch on for several months, to accommodate the Terra vote.

“Unless Agrium or CF's shareholders can get CF management to deviate from its "just say no" strategy before Nov. 19, CF could make a getaway and gobble up Terra.” said a report Tuesday from Morningstar analyst Ben Johnson. “This of course assumes a successful campaign to win the vote for its slate of directors at Terra's annual meeting, which is no slam dunk.”

“In the interim, the market seems to be betting on an Agrium-CF combination,” said Mr. Johnson, pointing to the relatively narrow spread between Agrium’s offer and CF Industries’ shares, compared with the gap between the price of Terra shares and the CF Industries’ bid.

Comments

[CarthageCap...:]

AGU's like a broken slot machine, it never pays out. Dont understand why they didnt pay out the shareholders when they got over 60% of the shares tendered. They will never get that high again, and eventually have to give up. As a CF shareholder I lost faith in AGU.

Sep 03 10:23 AM

[coolsoupy:]

Is the TRA special dividend a poison pill?

Oct 29 10:06 PM