While financing with which fertilizer firm Agrium has backed up its hostile takeover bids for U.S. rival CF Industries has expired, the Calgary company’s latest bid has not.
Agrium on Monday announced yet another extension on its latest cash-and-stock bid for CF, worth US$45 plus one Agrium common share per CF share. The bid, previously set to expire last Friday (Dec. 18), will now stand until at least midnight ET, Jan. 22, 2010.
Agrium, however, no longer has the financing facilities it had previously arranged with RBC and Scotiabank when it began its play for CF back in February.
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The company said Monday it had replaced those financing commitments with “highly confident letters” from both banks.
Agrium’s bids for CF until now had not been subject to any financing conditions, as the Canadian firm had cited both its “sufficient cash resources” and pledges from both banks.
But the Calgary firm said Monday its offer for CF is “now conditioned on Agrium having available to it proceeds of financing that are sufficient, together with cash on hand.”
“We and our financial advisors are confident that if we are successful in our pursuit of CF, we will be able to obtain financing on satisfactory terms without any delay in consummating the transaction,” Agrium CEO Mike Wilson said in a release Monday.
Agrium also recently announced plans to nominate a slate of pro-takeover directors to stand for election at CF’s 2010 annual meeting.
“We remain committed to acquiring CF and continue to question how the CF board can justify not even responding to our Dec. 2 letter,” Wilson said.
As of 5 p.m. ET on Dec. 18, about 25.2 million shares of CF’s outstanding common stock had been tendered into and not yet withdrawn from Agrium’s offer.
CF pulls back
Financing commitments are also near expiry for CF’s own planned hostile takeover bid for another U.S. rival, Terra Industries. The Chicago-area company said in a release Dec. 15 it “will not seek to extend the financing commitments for its proposed acquisition” of Iowa-based Terra.
Those commitments expire a week from Thursday on Dec. 31, and CF said its ability to obtain financing for any transaction with Terra after that date will depend on the credit markets and “other factors at that time.”
CF also said Dec. 15 it has sold off part of its previous stake in Terra’s shares, bringing its total holdings to “just below five per cent” of Terra stock.
The smaller stake means CF no longer has to publicly disclose certain information through the U.S. Securities and Exchange Commission, and future discussions or negotiations with Terra will not be publicly disclosed on Schedule 13D.
However, CF said, there can be “no assurance” that CF will take further action to buy Terra or that the financing it needs to fund such a takeover will be available after Dec. 31.
“We continue to believe that an acquisition of Terra is in the best interests of the stockholders of both companies and intend to consider alternatives available to us to advance this transaction,” CF CEO Stephen Wilson said last week.
Among the assets at stake in the three companies’ interplay are the ownership of three Canadian nitrogen fertilizer plants: an Agrium plant at Carseland, Alta., CF’s plant at Medicine Hat, Alta. and Terra’s facility at Courtright, Ont.
Agrium in October made a side agreement in which it would sell a 50 per cent stake in the Carseland plant to Terra, to satisfy federal competition watchdogs in Canada. That agreement, however, is conditional on Agrium completing its CF takeover.
