By Dow Jones
LONDON (Dow Jones) -- Canada's Agrium Inc. on Wednesday launched
an unsolicited acquisition bid for CF Industries Holdings, which
itself is making a hostile bid for fellow fertilizer producer Terra
Industries.
Agrium (AGU), based in Calgary, said it's bidding $3.6 billion
in cash and stock for CF Industries (CF), a deal that would add
CF's North American nitrogen, phosphate and crop-nutrient
distribution assets to Agrium's global wholesale and retail
capabilities.
CF shares surged 14% to $63.59, while Agrium's U.S.-listed
shares fell about 6% to $37.76 in mid-morning trade.
Terms would be structured so that each CF share could be swapped
for $31.70 in cash and one Agrium share, carrying a value of $72 a
share based on prices as of Tuesday's close.
Agrium said a deal with CF would create more synergies -- an
estimated $150 million annually -- than would be yielded under the
latter's plan to buy Terra Industries (TRA).
Agrium said a transaction would enhance earnings and cash flow
in 2010 and "significantly" boost them afterwards.
Deerfield, Ill.-based CF seems to be a prime target in the
fertilizer business.
Agrium disclosed in a public letter it's held deal talks since
before CF went public in 2005, while Terra also approached CF
several years ago about a combination.
On Monday, CF launched a all-stock bid valued at $2.1 billion
for Sioux City-based Terra Industries, a deal CF said would create
a fertilizer company with a bigger footprint in the U.S. grain belt
that could serve more customers.
Agrium's bid is conditional on CF dropping the bid for Terra,
shares of which have skyrocketed 50% since CF disclosed Jan. 15 it
wanted to do a deal.
Terra's shares recently stood unchanged at $24.80.