Equity Research and Investment Analysis

In the end, CF Industries did pay a high price, but obviously this was an attractive asset that caused a bidding war. In addition, the merger has allowed CF to avoid the hostile advances of Agrium. Analysts expect the deal to produce annual cost savings of $135 million, and they certainly have a strong enough balance sheet to handle the liabilities that will come with a deal of this size.

The rumor mill is centered on Mosaic (MOS) again, as there is renewed interest in a possible takeover bid. In mid-July when we first wrote about this topic (Mosaic's Potash Attracts Vale's Eye), the rumors originated in a Brazilian newspaper that mining giant Vale SA (VALE) was looking to diversify into potash mines. Mosaic is up about 2 percent even as the rest of the market is selling off.

The speculation has neither been confirmed or denied, but it is clearly moving the stock on heavy volume. The speculation is that a takeover bid for Mosaic would be somewhere around $25 billion, which is a little over $56 per share.

Guidance is a slippery issue because I don't know exactly what the possible implications are of misleading shareholders and investors, and as Mr. Ogg notes, it does raise the potential for a lawsuit, in an extreme case. What is clear, is that it does create animosity and distrust between management and shareholders.