Agrium raises bid for CF Industries

NEW YORK - Agrium Inc. said Thursday it is raising its bid for CF Industries Holdings Inc., in a final attempt to acquire its rival fertilizer maker.

In a statement Thursday, Agrium repeated what it has said in previous offers — that this is its "best and final offer." The offer has been extended until midnight, Nov. 18. Canada's Agrium has pursued CF since February, but has faced repeated rejections.

CF Industries, based in Deerfield, Ill., said it received Agrium's offer and plans to review the proposal. Agrium is based in Calgary, Alberta.

The new offer gives CF shareholders $45 in cash plus one Agrium share per CF share. That's a $5 increase in the cash portion of the proposal. The total value of the deal is $92.99 per CF share, or $4.52 billion, based on CF outstanding shares as of Sept. 30. The offer is a 7.6 percent premium over CF's closing price on Wednesday.

The fertilizer industry's hunger for snapping up rivals intensified at the start of the year when company share prices had been beaten down to significantly low levels. Share prices suffered as a result of the economic downturn's pressure on commodity prices, such as corn, which hurt fertilizer pricing and forced struggling farmers to scale back demand. Share prices have since recovered with an improving outlook for the industry, but still remain far below last year's levels.

"Everybody wants to buy when it's cheap," said Mark Connelly, an analyst with Sterne Agee. "But if the seller is not willing and not distressed, they say you're trying to take advantage of a temporary situation."

CF started the acquisition trend in January, when it began its pursuit of rival Terra Industries Inc. of Sioux City, Iowa. CF's advances continue to face resistance.

In a statement Thursday, Terra urged its shareholders to reject CF's latest acquisition efforts by voting for Terra's nominees to the board. CF has nominated three people for Terra's board.

On Wednesday, Terra rejected CF's most-recent offer of about $4.1 billion. At the time, CF said it "is confident" that Terra shareholders will show their support for the bid by voting for its nominees for Terra's board. The voting will conclude at Terra's annual meeting Nov. 20.

Earlier this week, CF raised its offer by adding cash to the bid. It said the new bid was worth $40.61 per share, a 5 percent premium on CF's previous all-stock offer.

Agrium shares rose $2.20, or 4.5 percent, to $50.14, while CF Industries shares fell $6.71, or nearly 8 percent, to $79.68. Terra Industries shares advanced 37, or 1 percent, to $35.91.

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