TORONTO (Reuters) – The board of U.S. fertilizer maker CF Industries has rejected rival Agrium Inc.’s sweetened bid worth about $4.5 billion US, arguing the proposal substantially undervalues the company.
CF has been fending off Agrium’s hostile bid since February as it pursues its own hostile bid for smaller U.S. rival Terra Industries.
On Nov. 5, Agrium raised the cash portion of its bid by $5 per share to $45 plus one Agrium share for each CF share. This implies a deal value of $92.99 per CF share based on Agrium’s closing stock price on Nov. 4. But the bump in the offer failed to impress CF’s investors, who expected a much bigger increase. CF shares fell sharply on Nov. 5 as investors bet on the improved prospects of a deal between CF and Terra.
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On Nov. 4, Terra rejected a sweetened bid from CF, which has nominated a slate to Terra’s board. A victory for the CF slate, which is slated to be voted upon on Nov. 20, would likely help clinch a deal with Terra.
Terra, based in Sioux City, Iowa, said the proposal continues to undervalue its near-term and long-term prospects. It called the offer opportunistic and said it was not in the best interests of Terra and its shareholders.
