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On Wednesday, the Canadian fertilizer producer Agrium Inc offered to buy U.S. rival CF Industries (NYSE:CF ) for $3.6 billion offering one Agrium common share and $31.70 in cash for each CF Industries share. The offer represents a premium of 30 percent over CF's closing price on February 24, 2009, and a premium of 42 percent over the 30-day volume-weighted average share price of CF, but CF Industries shares were trading at over $160 in June, over $150 in August 2008 and over $120 in September 2008. Subsequently an investigation by a law firm on behalf of current investors in CF Industries Holdings, Inc (NYSE: CF) over possible breaches of fiduciary duty and other violations of state law by the board of directors of CF Industries Holdings, Inc. (NYSE: CF) arising out of their failure to fully explore and seek out a transaction with Agrium, Inc., which would have the desired effect of maximizing shareholder value was announced.
If you are currently holding CF Industries (NYSE: CF) shares you have certain options and you should contact the Shareholders Foundation, Inc. immediately!
Email: mail@shareholdersfoundation.com
Or call us at: +1 (858) 779 - 1554
SeekingAlpha reports that there are 9 (!) reasons why CF Industries should reject Agrium offer and acquire Terra Industries. One of the reasons is that Agrium undervalues CF industries considering both short and long term earning power in the company.
Agrium Inc., which reportedly held “serious discussions”
CF Industries said in a press release that its board of directors will evaluate the proposal in the context of CF Industries’ strategic plans to create shareholder value, including its offer to acquire Terra Industries Inc.
SeekingAlpha says that CF should reject the offer because Agrium has a very unhealthy balance sheet, there is a possibility that rating agencies may downgrade Agrium 's debt rating significantly if it proceeds with CF Industries's acquisition due to too much debt and CF's conservative and prudent management on the other hand does not like debt.
SeekingAlpha predicts that unlike Agrium, both CF Industries and Terra Industries have excellent balance sheets with almost no (in case of CF) or very low (in case of Terra) long term debt and they would not only withstand the current economic crisis but their combination would thrive significantly as the combination of CF Industries and Terra Industries is such an attractive deal that they would have almost 50% market share in North America and would not only outperform Agrium but would give stringent competition to the likes of Mosaic and Potash.
Agrium Inc.’s proposal comes two days after CF Industries took its all-stock takeover offer directly to Sioux City, Iowa-based Terra’s shareholders. CF Industries made an all-stock offer for Terra Industries on Jan. 15. Under the proposal, Terra Industries shareholders would have received 0.4235 of a CF Industries share for each Terra share held. Terra Industries' board unanimously rejected the offer.
CF Industries Holdings, Inc, (CF Holdings) is a manufacturer and distributor of nitrogen and phosphate fertilizer products in North America. Shares of CF rose 20% in premarket trading to $66.88, while shares of Agrium slipped nearly 6% to $37.96, and Terra fell 3% to $24.
If you are currently holding CF Industries (NYSE: CF) shares you have certain options and you should contact the Shareholders Foundation, Inc. immediately!
Email: mail@shareholdersfoundation.com
Or call us at: +1 (858) 779 - 1554
Shareholders Foundation, Inc.
Trevor Allen
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mail@shareholdersfoundation.com
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