CF Industries Holdings Inc.’s Chairman and CEO Stephen Wilson used the company’s strong performance (see page 1) to take a jab at Agrium Inc.’s hostile takeover bid of CF. “CF Industries’s strong performance relative to its peers underscores our view that Agrium’s offer does not reflect the intrinsic earning power of this company. When Agrium’s offer was rejected in mid-May, it was very far from being compelling and, given our performance and industry dynamics, it’s even further away from being compelling now.”
“It is clear that CF’s shareholders view our offer to be very compelling as evidenced by the tender results and based on ongoing discussions we maintain with their shareholders,” said an Agrium spokesman. Some 62 percent of CF shares were tendered in the Agrium offer earlier in the summer, but many were withdrawn and the number dropped to 21 percent (GM July 27, p. 1).
“On the subject of the percent of shares currently tendered, it is customary in cases of unsolicited offers that once tender results are reported and the offer extended that most shareholders withdraw their tendered shares, 1) to preserve the liquidity of their positions, and 2) due to the fact if we bought the shares it would trigger CF’s poison pill. This is common practice for those familiar with unsolicited offers and is in no way an indication of the current level of support for our offer.”
CF’s Wilson told analysts there was no lack of communication between CF and Agrium, both at the advisor and CEO level. He said Agrium is an experienced industry player and has all the information it needs to make a compelling offer, but has chosen not to do so. “This means our focus, as it should be, is on advancing the proposed combination with Terra.” He said it is time for Terra to schedule its annual meeting. “We anticipate having regulatory clearance for our combination in early August, and at this point we’ll be positioned to close the transaction with Terra.”