CF Industries says it's considering master-limited partnership as well as 'other financial options;' company's stock jumps most in eight years on news

Mathew Kearney

December 4, 2013 (Bloomberg LP) – 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 eight years after saying it’s considering a master-limited partnership.

CF, the largest U.S. nitrogen-fertilizer maker, rose 11 percent to $237.14 at 10:25 a.m. in New York, the biggest intraday gain since its 2005 initial public offering.

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 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.

--Editors: Jasmina Kelemen, Tina Davis

To contact the reporter on this story: Simon Casey in New York at scasey4@bloomberg.net

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

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