Fertilizer-maker Agrium Inc. (AGU) has raised its takeover bid for smaller rival CF Industries Holding Inc. (CF). The company has increased its exchange offer for acquiring all of the outstanding shares of CF Industries to $92.99 per CF share based on Agrium’s closing stock price on Nov 4, 2009. Under the terms of the offer, stockholders would receive $45.00 in cash − an increase of $5.00 or 12.5% in the cash consideration − and one common share of Agrium for each CF share.  According to Agrium, this offer provides a premium of over 67% to CF’s closing price as on Feb 24, 2009, the day before Agrium made its first bid, and about 84% to CF’s 30-day volume weighted average price. Agrium has extended the expiration date of the exchange offer to Nov 18, 2009.  However, CF rebuffed Agrium’s offer, alleging substantial undervaluation of the ...

For Immediate Release

Chicago, IL – September 30, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Agrium (AGU), CF Industries (CF), Intrepid Potash (IPI), Mosaic (MOS), Potash of Saskatchewan (POT) and Market Vectors Agribusiness (MOO).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Fertilizer's Farming Problem

Hostile takeover attempts have kept fertilizer companies in the news. The acquisition talk has helped to overshadow a negative trend that should have investors concerned - ongoing cuts to full-year profit forecasts.

During the past 90 days, the Zacks Consensus Estimates have been revised downwards on several fertilizer companies, including Agrium (AGU), Intrepid Potash (IPI), Mosaic (MOS) and Potash of Saskatchewan (POT).

The most recent cuts were related to a warning from POT. The company predicted

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Hostile takeover attempts have kept fertilizer companies in the news. The acquisition talk has helped to overshadow a negative trend that should have investors concerned - ongoing cuts to full-year profit forecasts.

During the past 90 days, the Zacks Consensus Estimates have been revised downwards on several fertilizer companies, including Agrium (AGU), Intrepid Potash (IPI), Mosaic (MOS) and Potash of Saskatchewan (POT).

The most recent cuts were related to a warning from POT. The company predicted that its full-year profits would be in the range of $3.25 to $3.75 per share, instead of the prior guidance of $4 to $5 per share. The company blamed "continued slow demand and limited restocking by fertilizer distributors" as the reasons for the revised forecast.

All Is Not Well on the Farm

The big reason why profit projections for fertilizer companies have been falling is not weaker demand for fertilizer,

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Calgary-based Fertilizer Company Agrium Inc. (AGU) has again extended its deadline for its hostile offer of $3.9 billion to buy out rival CF Industries Holdings Inc. (CF). Agrium has stretched the deadline to August 19 from the previous deadline of July 22, stating that only about 21% or 10.4 million shares of CF Industries have been tendered and not withdrawn from the exchange offer as of July 17, 2009.

On June 23, CF’s shareholders had tendered about 62% of their total outstanding shares in support of Agrium's current offer of $40 plus one Agrium share per CF share. This was at 59% premium to CF's closing price on February 24, 2009, when the offer was made. Soon after the tender results, Agrium had extended the deadline to acquire CF Industries to July 22, 2009.

CF had repeatedly rejected Agrium’s takeover offer. Despite two upward revisions in the offer price, CF

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The premium we receive when selling the put option is the maximum we can gain in this strategy. The risk of

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Potash Producers Hopeful About Rising DemandA recent study conducted by the International Fertilizer Industry Association (IFA) has suggested a possible pick-up in fertilizer demand by the second half of this year. This led most of the fertilizer giants such as Potash Corp of Saskatchewan (POT), Intrepid Potash (IPI), Terra Industries (TRA), Agrium (AGU) and CF Industries (CF) to witness a surge in their stock prices.Since late 2008, the fertilizer industry has been adversely affected by slackening demand. Lack of confidence, limited access to credit, and lower grain prices led farmers to either defer fertilizer purchases or reduce application rates. Consequently, as the study showed, fertilizer consumption fell 14% in the first half of this year.Notwithstanding, the potash cartel (accounting for ...

The takeover battle between CF Industries Holdings Inc. (CF) and Agrium Inc. (AGU) took another turn when the former announced that it will consider a merger deal with Agrium, the hostile bidder on June 26, 2009. Stephen R. Wilson, Chief Executive, President and Chairman of CF Industries stated that Agrium should however make an attractive offer, which must interest the company's board.

Based in Deerfield, Illinois, CF had earlier repeatedly rejected Agrium's takeover offer. Despite two upward revisions in the offer price, CF had turned down Agrium's proposal on grounds of substantial undervaluation and associated regulatory issues. CF has stated that Agrium's final offer of about $4.4 billion continues to undervalue the company.

On June 23, CF's shareholders tendered 62% of their total outstanding shares in support of Agrium's current offer of $40.00 plus one Agrium share per CF share. Based on

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Commodity prices have been soaring. Oil, gold, copper, wheat and corn all recently hit multi-month highs. Even the Duke Brothers are making a mint on orange juice futures.

A steady stream of economic data showing a slower pace of deterioration in the U.S. has been the primary driver behind the recent surge. Also playing a role is the combination of a higher tolerance for risk, weekly fluctuations in inventories, the spring planting season, the dollar and sustained growth in China.

What's interesting about the rally is that it has yet to translate into higher earnings estimates for commodity-related companies.

Agriculture Companies

Wheat and corn futures recently set 8-month highs. Other agricultural-related futures have also soared, such as coffee. Profit forecasts for agricultural companies, however, have been trending lower.

There are 2 reasons for the disconnect.

The first is the credit crisis. Though the Treasury Department has deemed some banks too

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div style="text-align: justify;"Citigroup is out with a Fertilizer call upgrading span style="font-weight: bold;"Potash (NYSE:POT), Mosaic (NYSE:MOS)/span to Buy from Hold and span style="font-weight: bold;"Agrium (NYSE:AGU)/span to Hold from Sell.br /br /span style="font-weight: bold;"Looking Past the China Contract /span— In recent months investors have been sharply focused on the upcoming China potash contract and the risk potash prices could fall below last year’s $575/t level. However, the bigger risk in Citigroup's view is that the Ag complex will continue to rally on stronger grain fundamentals. There are three key reasons grain prices are moving higher, thus creating an environment for multiple expansion for fertilizer stocks:br /br /span style="font-weight: bold;"- Grain Supplies Remain Historically Tight —/span Last week’s USDA report indicated lean grain inventories, including significantly tighter corn stocks-to-use (16% vs. 20-year avg. of 24%). In our view grain prices don’t have a “cushion” – another major weather event or poor ...

Monday May 11, 2009 Navivest Canadian fertilizer producer Agrium (AGU) today announced that it is increasing its current outstanding offer to acquire CF Industries (CF) to $85.20 per CF Industries... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]