The poison pens are out in the fertilizer space. Agrium ( AGU) CEO Michael Wilson, in a letter Thursday to his counterpart at CF Industries ( CF), says his company's not the one that refuses to talk takeover. Michael Wilson's letter was in response to a letter CF CEO Stephen Wilson had written to CF shareholders criticizing Agrium's hostile offer, which first was made in February. CF wrote Wednesday that "if Agrium were serious about acquiring CF Industries, it would have at least tried to engage with us. The fact is that Agrium and its financial advisors have not contacted or attempted to contact CF Industries in well over a month. The CEO of Agrium called on March 6, 2009, to ask if we needed additional information and he has not called since then." Not so, says Agrium's Wilson: "Contrary to your assertions, and as you well know, we have attempted to engage you and your Board in discussions and each time we were rebuffed or ignored. "Again, to be abundantly clear, we reiterate that the full Agrium team and our advisors remain ready to meet with you and your advisors immediately -- and at a location of your choice -- to negotiate a mutually beneficial transaction between our two companies." Agrium's CEO also took issue with CF's approach. "CF has repeatedly alleged that Agrium is not serious about acquiring CF and that we made our offer in an attempt to interfere with CF's proposed acquisition of Terra ( TRA)
also hostile . "Let me assure both you and the CF stockholders that nothing could be further from the truth, Michael Wilson wrote. "To avoid any future confusion on your part, Agrium is 100% committed to acquiring CF. Our offer represented a premium of over 30% on the date it was announced and we have since raised the cash component of our offer by 10%. Furthermore, we have repeatedly indicated our willingness to pay more if CF would only meet with us and demonstrate additional value.
"Given this context, I was quite surprised by your recent letter to Terra questioning why Terra is not interested in 'negotiating a merger agreement' with CF, and stating that you do not understand Terra's 'reluctance to explore' a deal with CF." Agrium, based in Calgary, Canada, increased its offer for CF in March to $35 a share, for a total buyout worth $3.8 billion. The offer also includes one share of Agrium for each CF share. Agrium at the time was trading around $40. CF huffed that Agrium could afford $100 a share. CF CEO Stephen Wilson wrote Wednesday that CF "rejected Agrium's offer because of our commitment to stockholder value. We have shown that commitment and CF Industries stock has been the best performing stock in our peer group -- Agrium is by far the worst-performing stock. Agrium's offer is grossly inadequate and nothing Agrium says changes that. We are confident that our stockholders agree that the offer is inadequate. "We believe that Agrium is more interested in interfering with our business combination with Terra Industries, than in acquiring CF Industries at anything other than a bargain price. If Agrium were serious about acquiring CF Industries, it would have made a credible offer." Countered Agrium's Michael Wilson: "We fail to understand how your stated "commitment to stockholder value" is consistent with this blanket refusal or with your decision to restructure your offer for Terra to eliminate a CF stockholder vote. "Based on unaffected stock prices, Agrium is offering a multiple for CF that is 37% greater than that proposed by CF for Terra. How can you on the one hand, question why Terra won't engage in merger discussions with CF, while on the other hand, you refuse even to discuss our higher premium offer?
Earlier this week, Riskmetrics Group's ISS Governance Services advised CF shareholders not to cast votes on a dissident proxy that was submitted by Agrium, which last week urged investors to withhold their votes for the three director nominees as a protest of CF's rejection of its takeover attempts. Deerfield, Ill.-based CF has traded between $37.71 and $172.99 in the past 52 weeks and is up about 49% since the start of the year. On Thursday, CF was trading at $73.34, down $1.15. Agrium has traded between $22.08 and $113.88 in the past 52 weeks, and is up about 13% for the year. On Thursday, Agrium was down 3 cents to $41.31. The grass may be in full bloom soon, but it doesn't look like this deal will be.