By Steve Gelsi
NEW YORK (Dow Jones) -- Agrium Inc. on Friday increased its
buyout offer for smaller rival CF Industries and held out the
possibility that it could go even higher in a sign that plenty of
ammunition remains in what's become a three-way merger shootout
among fertilizer producers.
Agrium (AGU) offered $35 in cash and on share of common stock in
exchange for each share of CF Industries Holding Inc. (CF), with
the cash portion representing 10% boost over an earlier offer that
CF Industries has rejected.
Based on Agrium's Thursday closing price, the latest offer
represents a premium of 35% over CF's closing price on Feb. 24, the
day before Agrium announced its initial proposal.
The offer amounts to a price of $74.90 a share for CF
Industries, 90 cents higher than the latter's closing price on
Thursday. With 48.4 million shares outstanding, the latest offer
from Agrium values CF Industries at $3.63 billion.
"We would consider increasing our offer further to reflect any
additional value that the CF board and management can demonstrate
arising from the combination of our two companies," said Agrium
Chief Executive Mike Wilson.
Agrium's initial offer followed an effort by CF Industries to
buy smaller rival Terra Industries (TRA) about two months ago.
Since then, the companies have all rejected their respective
buyout offers, giving rise to a second round of offers.
All of the merger proposals amount to hostile bids, with
management both at CF and Terra having rebuffed their larger
suitors.
On March 16, Agrium said it would take its $4 billion offer to
buy CF Industries directly to shareholders.
In midday trading Friday, shares of Agrium fell 2% to $39.10,
while CF Industries rose 0.4% to $74.30 and Terra Industries lost
1.4% to $29.65.