LoneRngr

9 Reasons Why CF Should Reject Agrium and Acquire Terra Industries

i'm with you BS. while i don't know which way this will turn out, AGU has a strong track record at making accretive acquisitions. they have been eyeing CF since before the IPO and chose now to pounch, squeezing all the merger arb players in the process. on the conference call it seems they have done their homework, and see really clear synergies to the deal as the 2 players come up against each other in the marketplace all the time.

i don't know that a player like CF deserves a 15x multiple, as the nitrogen business is hugely volatile and margins can swing.

as for potash prices, suprisingly they haven't fallen as much as most other commodities. US cornbelt prices are only down about 18% from the highs, and the China price just ticked up 20% to about 4000 RMB. not many sales though as all eyes are on the potash negotiations due to conclude soon.

on the surface it seems like a good deal to me. cash component of the deal is only $1.5b and CF has about $1.0b on the balance sheet. OPM (Other People's Money) works for me! i think AGU is smart to buying when others are selling, time will tell...