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Agrium wins 62 percent of CF stock

June 24, 2009 – Nearly five months after Agrium Inc. began making overtures to a friendly merger with CF Industries Holdings Inc., the Calgary-based corporation is now considering its options in the wake of an offer worth $3.9 billion (US).  


June 24, 2009
By National Post

June 24, 2009

Peter Koven

Agrium Inc. is weighing all its options, including legal recourse, as it tries to forge a merger with CF Industries Holdings Inc. that a majority of CF's own shareholders have endorsed. It now believes it has hit a turning point.


Mike Wilson, Agrium's chief executive, was amazed yesterday when CF issued a statement saying its shareholders do not support Calgary-based Agrium's US$3.9-billion offer. That came out just after 62 percent of CF's shares were tendered to the bid.


"Most of the time, boards listen to the majority of their shareholders," he said yesterday. "And if they don't, I would call that very poor corporate governance."


He speculated that CF's statement may have been written before the tender results even came through.


Sources said the final tender would have been higher than 62 percent, except that there were impediments that prevented some shareholders from tendering their stock. But they support a merger.


Since February, Agrium has applied steady pressure to Illinois-based CF to convince it to hold friendly merger talks and create a stronger agriculture giant. It raised its offer twice and even launched a proxy fight against three CF directors.


Finally, Agrium just urged shareholders to tender to its offer.


Agrium is now holding up the 62 percent tender as evidence that CF shareholders want this merger to happen, and that it should now realize it needs to sit down and talk with Agrium.


"From our perspective, [CF CEO] Steve Wilson's a good man. He understands that he's there to represent his shareholders. I think he needs time to absorb this, and once he does I believe they'll engage," Mr. Wilson said. He said the strong showing in the tender offer is proof his bid is "full and fair."


But so far, CF has ignored Agrium's pleas and has instead pursued an acquisition of Terra Industries Inc., which has rebuffed it as strongly as CF has rejected Agrium.


"Contrary to Agrium's assertions, the tender offer results do not change the facts that Agrium's offer substantially undervalues CF Industries, our shareholders do not support the price in the offer, and the offer has significant regulatory issues," CF's Mr. Wilson said yesterday.


Agrium cannot simply proceed with a hostile takeover, because CF has a firm shareholder right's plan (or "poison pill") and is incorporated in Delaware, where a legal statute makes hostile takeovers very long and arduous.

Best options now being considered


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