Agrium urges CF Industries shareholders to accept its hostile bid

Fertilizer giant Agrium Inc. urged shareholders of rival CF Industries Tuesday to tender their shares to its hostile takeover offer as the June 22 expiry date draws closer.

Agrium warned that its latest bid, made in early May, is its best and final offer and that it will walk away from the deal unless "a compelling majority of shares" are tendered.

The Calgary-based company is offering $40 in cash plus one Agrium share for each CF share.

Agrium said the bid is valued at $88.20 per share, based on its June 15 closing share price, and represents a premium of 59 per cent over CF's share price on Feb. 24 the day before Agrium launched its first bid.

That bid, valued at $3.6 billion US, was rebuffed by CF's board of directors.

Agrium said RiskMetrics Group, a leading independent proxy voting and corporate government advisory firm, has recommended that CF shareholders tender their shares to the latest offer.

"Our offer is far superior to any alternative articulated by CF, including remaining independent or paying a premium for Terra," Agrium CEO Mike Wilson said in a release.

CF Industries itself is engaged in a hostile takeover bid for Terra Industries Inc., a U.S. nitrogen producer. That offer, valued at $2.2 billion US, was set to expire June 12 but has been extended to June 26.

"We are prepared to execute immediately a fully financed, binding merger agreement but CF stockholders must send an unambiguous message to CF's board by tendering their shares into our offer," Wilson said.

"We will continue to press CF if we receive a compelling majority of shares tendered, but we will walk from the transaction if we do not," he said. Shares of Agrium closed down $1.97 at $46.23 US on the New York Stock Exchange, and lost $2.30 to $52.25 on the Toronto Stock Exchange.