(Adds CF comments starting in the fifth paragraph and updated
stock prices.)
DOW JONES NEWSWIRES
Agrium Inc. (AGU) will continue to press its twice-sweetened bid
for CF Industries Holdings Inc. (CF) after CF shareholders tendered
62% of their holdings in support of the $3.89 billion offer.
As such, Agrium extended its roughly four-month effort to
acquire the rival fertilizer company again, this time to July 22. A
completed deal would boost Agrium's wholesale business and form the
world's fourth-largest fertilizer producer.
"CF stockholders have sent a resounding message to CF's board
that they support Agrium's offer," said Agrium President and Chief
Executive Mike Wilson. "These are extraordinarily strong results,
particularly given that CF's poison pill and other defense
mechanisms are still in place and we urge CF's board to respect
this clear message from its stockholders."
Wilson said several weeks ago that if CF shareholders didn't
show their backing for the bid, Agrium would walk away in the face
on continued resistance from CF. But CF holders tendered 30.1
million shares of the company's estimated 49.1 million shares
outstanding as of midnight, far greater than the 1.5 million
tendered as of two weeks ago, when Agrium also extended its
offer.
CF Chairman and Chief Executive Stephen Wilson said the 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." The company has continued a Agrium/CF combination would
have a tough time passing antitrust muster.
CF's board and management repeatedly have rebuffed Agrium's
approaches, instead backing a planned takeover by CF of a third
fertilizer company, Terra Industries Inc. (TRA). The three
companies have battled for position amid weakened stock prices to
buy up production capacity ahead of an expected sector rebound. CF
on Friday extended its $2.93 billion tender offer for Terra, which
hasn't been well-supported by Terra shareholders. Also, Terra's
executives are against being acquired by CF.
Shares of all three companies were higher. Agrium shares are up
41 cents, or 1.1%, to $39.29; Terra stock is up 32 cents, or 1.3%,
to $25.08; and CF is up $1.93, or 2.8%, to $71.31. Agrium shares
are down nearly 63% since last year.
Agrium's latest bid is $40 and one share of its stock for each
share of CF. That values CF at $79.23 share, a 14% premium to
Monday's closing price of $69.32. Last year when the fertilizer
industry was booming, the stock briefly traded at more than
$170.
Last week Agrium's offer received support from RiskMetrics
Group, though the proxy-advisory firm - after talking with
shareholders - hinted Agrium would need to boost its bid yet again
to win over a majority of CF shareholders. Based on those
conversations, Risk Metrics said it appeared the market clearing
price would be $90 to $100 a share.
CF early on said Agrium's offers "substantially undervalued" the
company. In March, CF claimed Agrium could afford a combined
cash-and-stock bid valued at $100 a share. CF also has cast the
Agrium's approaches as an effort to disrupt its own pursuit of
Terra and block consolidation in the wholesale fertilizer
sector.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com