Agrium Inc. on June 29 released a sharply-worded criticism directed at Steve Wilson, chairman and CEO of CF Industries Holdings Inc., and the CF board for their continued refusal to engage with Agrium in its offer to acquire CF.
“Following a successful stockholder referendum on Agrium’s offer and after we reached out to CF and its advisors, CF’s Chairman and CEO Steve Wilson told me that CF would not meet with Agrium,” said Mike Wilson, Agrium’s President and CEO. “Contradicting recent public comments that CF is prepared to engage, he stated to me that ‘there is no reason to meet because nothing has changed.’ Steve Wilson said he called since stockholders wanted him to engage with Agrium. I do not consider returning my phone calls to say that CF refuses to meet to be engagement and I don’t think CF stockholders will either.”
Agrium reported on June 23 that CF stockholders had tendered approximately 30.14 million CF shares, or 62 percent of the total outstanding CF shares, into its offer of $40 in cash plus one Agrium share per CF share as of the offer’s expiration date at 12:00 midnight, June 22. Agrium subsequently extended the expiration date of the offer until 12:00 midnight, New York City time, July 22, 2009.
Referring to the “compelling majority of CF shares” that were tendered by CF stockholders in support of the Agrium offer, Agrium’s Wilson said “it is striking that CF would dismiss the results of the tender offer and refuse to make any effort to elicit additional value for their stockholders by engaging with us and demonstrating new value.
“As we explicitly stated publicly and directly to CF stockholders, tendering shares into our offer is an unambiguous message to CF’s board in support of a transaction with Agrium,” Wilson continued. “The simple fact is CF stockholders responded, and CF is ignoring them. A majority of CF’s long-term holders sold off their position some time ago and the large majority of the remaining stockholders clearly support an Agrium/CF combination.”
Agrium said it remains committed to acquiring CF and is actively considering “all available options to give the owners of CF the voice in the company they are entitled to.” Stated Wilson: “We promised CF’s stockholders that if we received a compelling majority in our June 22 tender offer we would press CF to engage with us to negotiate a mutually beneficial combination. We have reached out to the Chairman of CF’s board and have been rebuffed.”
CF CEO Stephen Wilson told The Wall Street Journal on June 26 that CF would consider a deal if it was a “compelling offer.”
Wilson said the shareholders tendered, not because they support the current offer, but that they want an event to occur. CF’s position is that nothing new has happened regarding price and that its shareholders really want a higher price. As previously reported, RiskMetrics, the advisory firm, said many CF shareholders are eyeing an offer of $90-$100. CF has indicated $100 or above might be a good number ?Çô at least one that Agrium could afford and still make the deal work.