Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

CF Rises After Saying It’s Mulling Partnership Structures

Dec. 4 (Bloomberg) -- CF Industries Holdings Inc., the fertilizer producer that’s been criticized by activist hedge fund Third Point LLC for its dividend payments, jumped the most in four months after saying it’s considering a master-limited partnership.

CF, the largest U.S. nitrogen-fertilizer maker, rose 11 percent to $237.07 at the close in New York, the biggest gain since July 29.

The company is in talks with financial advisers to evaluate an MLP and “MLP-like structures along with other financial options,” Deerfield, Illinois-based CF said today in a filing containing presentation slides.

MLPs are structured to pay cash to unitholders, shielding the partnership from corporate taxes. Many MLPs are energy-related because the U.S. tax code limits the structure primarily to natural-resources businesses. CF uses natural gas to make nitrogen fertilizer.

Third Point, run by activist investor Dan Loeb, urged CF in July to pay a bigger dividend. CF was trading at an “unwarranted discount” to its fertilizer and chemical peers, according to Third Point’s second-quarter letter to its investors. In October, CF raised its dividend by 150 percent.

Third Point holds a 1.5 percent stake in CF, according to data compiled by Bloomberg.

CF also said in the presentation today that it will “continue to evaluate increasing” the dividend over time.

Susan Fisher, a spokeswoman for CF, didn’t immediately respond to a voicemail and e-mail seeking further comment.

“CF is outlining positive steps sooner than we expected,” Matthew Korn, a New York-based analyst for Barclays Plc, who recommends buying the shares, said in a report today.

To contact the reporters on this story: Simon Casey in New York at scasey4@bloomberg.net; Shruti Date Singh in Chicago at ssingh28@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.