CF shareholders back Agrium bid in vote

Thu Nov 19, 6:41 AM
NEW YORK (Reuters) - About 62 percent of CF Industries' shares have been tendered in favor of Agrium Inc's hostile acquisition bid, according to a source familiar with the matter, but a different vote later in the week is more likely to determine the outcome of the drawn-out takeover battle.
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(Reuters)

By Michael Erman

NEW YORK (Reuters) - About 62 percent of CF Industries' shares have been tendered in favor of Agrium Inc's hostile acquisition bid, according to a source familiar with the matter, but a different vote later in the week is more likely to determine the outcome of the drawn-out takeover battle.

Terra Industries' annual meeting on Friday, where CF has nominated a slate of three directors, more likely will determine a winner in the merger battle among the three fertilizer makers.

CF, which has been fending off larger rival Agrium's overtures since February, is locked in its own hostile campaign to acquire Terra.

Agrium is offering $45.00 in cash plus one of its shares for each CF share in what the company has called its best and final offer. This implies a deal value of $101.90 per CF share, or $4.95 billion, based on Agrium's closing stock price on Wednesday. CF shares closed at $86.29.

Although a majority of its shares were tendered in favor of the offer, CF can continue to stymie a deal. The Deerfield, Illinois-based company has a poison pill and other defense mechanisms in place that would prevent Agrium from completing the transaction.

About 62 percent of CF shares were tendered in an earlier Agrium bid in June, but many viewed that vote not as a referendum on value, but on whether shareholders were interested in a deal with the company at all. Agrium pushed the most recent tender as a vote on the merits of the bid itself.

"Tendering your shares into this offer will send an unambiguous message to the CF board: the owners of CF want this deal at this price," Agrium told CF shareholders on Wednesday in a letter that was also printed in a full-page advertisement in the Wall Street Journal.

The almost year-long saga has led some investors to facetiously label the three-way battle the "Fertilizer Wars," or the "Ultimate Fertilizer Championship."

Calgary, Alberta-based Agrium's bid is contingent on CF dropping its pursuit of Terra.

Deerfield, Illinois-based CF would get the upper hand in the merger battle if its slate prevails at Terra's annual meeting on Friday, but that would not ensure a deal with Terra. Sioux City, Iowa-based Terra has an eight-member board, and only three seats are up for election this year.

(Additional reporting by Euan Rocha; Editing by Lisa Von Ahn)