CF started off the week of 23 March by sweetening their offer for Terra by 11%. This effort elicited a prompt no thank you response the next day from Sioux City. At the same time, CF responded to Agrium's entreaties with a not so flattering assessment of the Calgary Team's business model and acquisition history. Those points made, CF then went on to indicate that Agrium could afford to pay USD 100 per share for CF. Agrium's offer at the time was valued at about ~$72 per share. Agrium responded on Friday, throwing some more chum on the water, nudging up their bid by $3 per share. In our view Agrium is going to have to put away their change purse and get out their check book if they want to close this deal. This is a sellers' market. Not only are fertilizer shares out performing the overall equity market, but Business Week has just ranked CF #2 on their list of top 50 corporate performers. CF is the only fertilizer company on this list; which evaluates companies on the basis of their long term performance. At this point Agrium might consider taking a lesson from their potash customers. In a similar vein, a wizened Japanese fertilizer salesman once told us, "No business is better than bad business".
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