Agrium moves for seat on CF board

Agrium Inc. is taking steps to remove directors at CF Industries Holdings who have been blocking the Canadian company's hostile acquisition bid since February.

Calgary-based Agrium said Wednesday it will nominate a slate of directors for election at CF's 2010 annual meeting and has challenged the American fertilizer maker's current board to allow shareholders to decide whether they want to accept the takeover offer.

Agrium didn't identify its nominees.

In a letter to CF's Board, Agriumcalled on CF to remove a "poison pill" provision that is meant to protect shareholders in the event of a hostile takeover. Agrium has said62 per cent of CF's outstanding shares have been tendered to its offer of US$45 in cash plus one Agrium share for each CF share.

Based on Agrium's closing price of $56.97 USin New York on Tuesday, its proposal values CF at $4.95billion US.The offer expires at midnight Dec. 18.

"Unfortunately to date, CF has declined all opportunities to engage directly with Agrium or its advisers," Michael Wilson, Agrium's president and chief executive officer, wrote in the letter to CF's board.

"The time is overdue for you to remove these preclusive barriers and let your stockholders decide for themselves whether to accept Agrium's offer."

CF 'unreasonable'

Wilson added that CF's continued reliance on the poison pill provisionis "unreasonable."

Agrium added that it is open to discussing modifications to its offer.

Last month, Agriumincreased the cash portion of its bid by $5 per share, declaringthis the "best and final" offer for CF, a nitrogen and phosphate producer based inDeerfield, Ill.

The offer, like its predecessors, was dismissed by CF, which is caught up in its own attempt at a hostile takeover of more specialized fertilizer companyTerra Industries Inc.

In late November, three CF nominees were elected to the Terra board after the company rejected CF's most recent cash-and-stock offer, which valued Terra at $4.1 billion US.

Agrium's offer for CF is conditional on it dropping the attempt to buy Terra.