Fertilizer company continues takeover bid
July 21, 2009 – The support of its shareholder base appears to be on the wane, and yet Calgary-based Agrium has announced it will continue to engage in a takeover bid of its US rival CF Industries.
July 21, 2009 By Saskatoon StarPhoenix
July 21, 2009
Agrium Inc. will continue its long-running takeover bid for a US fertilizer rival, it indicated Monday, even as shareholder support appears to wane.
Calgary-based Agrium said it is pressing ahead with its hostile bid for Illinois-based CF Industries as it extended its $3.8-billion US offer -set to expire Wednesday -to Aug.19.
Analysts noted the number of CF shareholders tendering to the offer has dropped over the past month and investors expect the tussle to drag on all summer, unless Agrium ups the ante.
"Agrium really needs to do something to show that they are serious," said Malcolm Polley, president of Stewart Capital Advisors, which has CF shares among the assets it manages.
"The amount of support they are getting from CF shareholders is dwindling, and I think the CF shareholders are getting tired of this game – do something already -and they don't seem to be in any big hurry to accomplish anything."
Without getting CF to the negotiating table, he said Agrium has few options at this point after missing a deadline to elect directors to CF's board. CF can also launch a so-called poison pill to thwart a forced takeover.
"It's kind of bizarre that they haven't tried to turn up the heat by raising their bid again," said Polley.