Mike Wilson, Agrium CEO
Canadian fertilizer giant Agrium Inc. has agreed to sell half of a nitrogen facility in Alberta for $250-million (U.S.) to U.S.-based Terra Industries Inc. - but with some significant conditions attached.
For one thing, Agrium must complete a hostile takeover of CF Industries Holdings Inc. , which has been trying to buy Terra.
CF Industries has repeatedly rejected Agrium's offer of more than $4-billion in cash and stock, saying it wants to remain independent.
Now Terra Industries is seeking to buy half of Agrium's Carseland nitrogen facility for the equivalent of $258-million (Canadian).
Agrium is hoping its new Terra deal will help push the CF acquisition forward. It has set a Nov. 13 deadline for the CF deal, the latest in a series of extensions.
Agrium chief executive officer Mike Wilson says his company will press CF to begin meaningful discussions. In the past, CF has rejected Agrium's calls for talks.
"These actions will enable us to keep moving forward with the acquisition of CF Industries," Mr. Wilson said in a statement.
"We will continue to press CF to engage with Agrium. We urge CF to begin meaningful discussions with us concerning our proposed acquisition," he added.
Agrium said it also had a conditional supply arrangement with Terra for a long-term supply of approximately 175,000 tonnes of nitrogen products from Terra's facilities.
The Terra agreements are subject to the company raising $600 million of debt capital and other customary closing conditions.
Terra said the deal with Agrium allowed it to expand its portfolio of nitrogen fertilizer manufacturing assets.
"This transaction is consistent with Terra's pure-play nitrogen strategy, which distinguishes Terra from its competitors. The transaction would be immediately accretive to Terra shareholders and we believe it is a solid opportunity to create shareholder value," said Michael Bennett, Terra president and chief executive officer.
Meanwhile, Agrium has extended the expiration date on its CF offer once more until Nov. 13.
Terms of the offer, which was to expire Oct. 22, remain unchanged at $40 (U.S.) in cash plus one Agrium share for each CF share.
Agrium is a retailer of agricultural products and services in the U.S., Argentina and Chile, and a global producer and wholesale marketer of nutrients for agricultural and industrial markets.
Its shares closed at $55.40 Friday on the Toronto Stock Exchange.