(Updates to add comment from CF Industries)
DOW JONES NEWSWIRES
Agrium Inc. (AGU) said Monday it has again boosted the cash
portion of its hostile bid for rival fertilizer maker CF Industries
Inc. (CF), this time by 14%, as the company struggles to build
shareholder backing for the $4.18 billion takeover effort during an
ongoing three-way battle in the sector.
CF acknowledged receipt of the bid and said its board "will
evaluate the revised proposal carefully."
Agrium, the largest of the three companies by revenue, said it
will now offer $40 a share in cash from its previously sweetened
offer of $35 a share. The stock portion of one share of Agrium for
one share of CF remains the same.
The latest offer values CF at $85.20 a share - 18% higher than
Agrium's initial offer in February - or $4.18 billion in total.
The move comes after Agrium tried to urge CF shareholders to
withhold their votes from the board's slate of candidates last
month. All three CF directors up for re-election were backed at the
company's annual meeting.
Meanwhile, CF has made its own bid for a third peer, Terra
Industries Inc. (TRA). CF has continued to call Agrium's offer
"grossly inadequate."
The jockeying for position comes as fertilizer producers look to
take advantage of the drop in sector stock prices since last summer
to buy up production capacity ahead of an expected rebound in
prices.
Agrium's shares were recently down 1.7% at $44.45 in premarket
trading, while CF gained 4.3% at $76.94. CF said the latest offer
values its shares at $85.20.
Agrium Chief Executive Mike Wilson said the "substantial
increase" in cash provides CF shareholders with an attractive
opportunity and reaffirms the company's commitment to the deal.
He added the company has attempted to meet with CF's management
in recent days to discuss an increased offering price, but CF has
rebuffed its efforts.
Agrium also extended the expiration date of its offer to
midnight EDT, on June 15. It had been set to expire May 19. Agrium
said as of midnight Friday 1.3 million of CF's 49.1 million shares
outstanding had been tendered.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com
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