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Here are highlights from Thursday's Analyst Blog:

Agrium Bid: Bottom for Fertilizers?

Agrium Inc. (NYSE: AGU) today made a hostile $3.6 billion bid for CF Industries (NYSE: CF). The bid is for $72/share, which is a 30% premium to the previous day's closing price. It is one share of Agrium plus $31.70 in cash. Committed financing is in place from Canadian banks.

Agrium has been acquisitive, and recently completed the acquisition of UAP Holdings, a fertilizer distributor. This deal would triple Agrium's capacity to make phosphates and nitrogen-based fertilizers. There would be $150 million in synergies, and the deal is conditional on CF Industries dropping its bid for Terra Industries (NYSE: TRA).

Gerdau Steel Lowered to Sell

We are downgrading our recommendation on Gerdau S.A. (NYSE: GGB) from Hold to Sell based on poor 4th quarter results and a huge decrease in demand for steel worldwide. The recent decline in steel prices and the international economic slowdown creates a more challenging business environment for the steel industry.

The company's strategy to grow through acquisitions based on debt is contributing to the negative news. Moreover, huge exposure to the U.S. market during a recession is a major concern.

Euroseas Estimates Up & Down

We are retaining our Hold on Euroseas Ltd. (NASDAQ: ESEA), but raising our target price to $4.50.

In 2008's 4th quarter, ESEA posted diluted EPS before nonrecurring items of $0.23, down 55% from the $0.51 earned in the prior-year period. Total net revenues of $23.7 million decreased 21%, which reflected a 32% decline in the average time charter equivalent rate to $17,971 per day from $26,479 per day in the year-ago quarter, partly offset by a gain in vessels to 16.00 vessels versus 14.63 vessels in the same period in 2007.

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