("UPDATE: Agrium Boosts Cash Portion Of Bid For CF Industries,"
published at 8:23 a.m. EDT and a 2nd update at 10:23 a.m. made an
incorrect reference to who initially make a takeover offer for CF.
A corrected version of the 2nd update appears below.)
(Updates with CF response, conference call details and share
prices)
DOW JONES NEWSWIRES
Agrium Inc. (AGU) boosted the cash portion of its hostile bid
for rival fertilizer maker CF Industries Inc. (TRA) 10% as the
company looks to build shareholder backing for the takeover
effort.
CF said its board would "evaluate" the new approach.
Agrium, which launched an exchange offer to CF shareholders last
week, also announced it will wage a proxy effort ahead of CF's
annual meeting next month.
The Canadian company will recommend shareholders withhold votes
for CF's board nominees. The company has scheduled an investor call
for 11.00 a.m. EDT (1500 GMT).
The moves are the latest in a three-way battle involving Agrium,
CF and Terra Industries Inc. (TRA).
Terra has rejected a hostile offer from CF, which has in turn
launched a proxy contest to replace three Terra directors at its
annual meeting in May.
Agrium said Friday it was boosting the cash portion of its CF
offer to $35 from $31.70. The stock portion of one share of Agrium
for one share of CF remains the same.
The latest offer values CF at $74.90 a share, 5.5% higher than
Agrium's initial bid of $72, or $3.6 billion in total. CF closed
Thursday at $74 as investors have been ancitipating a higher offer
from Agrium.
"CF Industries' board of directors will evaluate the revised
proposal in the context of CF Industries' strategic plans to create
shareholder value, including its proposed business combination with
Terra Industries Inc," said Chuck Nekvasil, director of public and
investor relations in a emailed rsponse.
Agrium's President and Chief Executive Mike Wilson said its
improved offer shows the company's committment to closing the deal.
He also reiterated the offer is a much better alternative for CF
shareholders than their company acquiring Terra, which has
repeatedly rejected CF's approaches.
CF has so far rejected Agrium's advances, and Wilson said Friday
"we don't understand why CF would summarily reject our offer
without any attempt to negotiate a mutually beneficial
transaction."
The struggle comes as fertilizer producers look to take
advantage of the drop in sector stock prices since last summer to
buy up production capacity ahead of an expected rebound in
prices.
Agrium's exchange offer for CF is slated to expire at 12 a.m.
EDT (0400 GMT) on May 19.
CF shares were flat at $73.76, with Agrium 2.5% lower at 38.91
and Terra down 4% at $28.87.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com
(Doug Cameron contributed to this article)