The Successful Investor Hotline – Friday, November 6, 2009

Article Excerpt

AGRIUM INC., $53.94, Toronto symbol AGU, has raised its takeover offer for U.S.-based fertilizer maker CF Industries Holdings Inc. (New York symbol CF). CF shareholders will still receive one Agrium common share for each CF share they own. But they will also get $45.00 in cash, up from $40.00 under the old bid (all amounts except Agrium’s share price in U.S. dollars). This new offer expires November 18. Using current prices, Agrium’s offer is worth $95.50 per CF share (or a total of $4.6 billion). However, CF is trading at $79.02, or 17.3% below Agrium’s offer. The large gap indicates that investors feel Agrium’s offer will fail. Instead, they probably feel that CF will ultimately succeed in its attempt to buy rival fertilizer maker Terra Industries Inc. (New York symbol TRA). Terra has rejected CF’s latest offer, so CF now aims to replace several of Terra’s directors with its own nominees at Terra’s annual meeting on November 20. If CF buys…

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