U.S. fertilizer firm CF Industries, the target of a hostile takeover bid by Calgary rival Agrium, has raised the stakes in its own hostile bid for another rival, Terra Industries.
Chicago-based CF on Friday announced it would increase its offer for Iowa fertilizer firm Terra by US$4.75 cash per share, for a total of US$36.75 plus 0.1034 CF shares per Terra share.
“We have made a compelling offer, which represents more than a 50 per cent premium to what we believe would be the unaffected trading price for Terra,” CF CEO Stephen Wilson said in a release Friday.
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Terra, which has rejected all of CF’s previous overtures since January, said in a release Monday that its board, “consistent with its fiduciary duties… is reviewing the revised proposal and expects to consider it at a board meeting scheduled for later in the week.”
CF last month succeeded in getting a slate of three pro-merger nominees elected to Terra’s board.
CF since February has repeatedly rejected takeover bids from Agrium, including its most recent offer of US$45 plus one Agrium common share per CF share. CF has criticized Agrium’s play as an attempt to interfere in its own bid for Terra.
Agrium, in return, has urged CF’s board to “exercise good corporate governance and allow its stockholders to determine if they want to receive a premium (from Agrium) or pay one (for Terra).”
Among other assets at stake in the three companies’ interplay are the ownership of three Canadian nitrogen fertilizer plants: an Agrium plant at Carseland, Alta., CF’s plant at Medicine Hat, Alta. and Terra’s facility at Courtright, Ont.
Agrium in October made a side agreement in which it would sell a 50 per cent stake in the Carseland plant to Terra, to satisfy federal competition watchdogs in Canada. That agreement, however, is conditional on Agrium completing its CF takeover.
