CALGARY, Alberta (TheStreet) -- Fertilizer-maker Agrium (AGU) has sweetened its bid for smaller rival CF Industries (CF) - Get Report, no doubt responding to CF's move earlier this week to pressure Terra Industries (TRA) in its own hostile takeover attempt.
Agrium on Thursday morning said it hiked its cash-and stock tender offer to the equivalent of $92.99 per CF share, based on Agrium's closing stock price Wednesday. CF holders would receive $45 in cash per share, up from $40, along with one Agrium share, for each CF share they own.
Agrium said the value of the offer is a 67% premium to the closing price of CF shares on Feb. 24, the day Agrium first made its bid. The offer expires on Nov. 18.
CF, meanwhile, issued a statement in response to Agrium's latest proposal. The same tune was sung: "Agrium's offer represents substantially lower multiples of EBITDA than CF Industries' offer for Terra Industries," CF said in the release.
In fertilzer, apparently, all love is unrequited. CF has consistently spurned Agrium as much as CF's target, Terra Industries, has spurned CF. Only just this week, CF upped its own bid for Terra, whose board of directors
for the sixth time since January. CF has been pursuing Terra partly as a way to thwart Agrium.
Also on Thursday, Terra's board sent a letter to its shareholders urging them to keep their distance from CF.
"CF's latest proposal is financially inadequate, even by applying valuation methodologies used by CF, and is only $2.00 per share more than the nominal value of its prior proposal," Terra said in the letter.
In its latest bid, CF offered $32 a share in cash plus a fraction of a CF share in exchange for each Terra share. The cash portion of the bid includes the $7.50 per share special dividend declared by Terra as an anti-takeover measure, a point that Terra was quick to raise in its letter, arguing to its shareholders that they would effectively be giving away $750 million total if they accepted the CF offer.
Interestingly, in order to secure regulatory approval for any potential deal from Canadian authorities, Agrium has agreed, should it take control of CF, to sell parts of the CF's Canadian operations to Terra Industries.
In premarket trading Thursday, CF shares were trading lower by 7.4% from the previous close, Agrium shares were unchanged, and Terra shares were jumping by about 4%.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.