* Offer extended to Sept. 22
* Offer stands at US $40 plus one Agrium share
* CF Industries says extension a 'distraction'
* CF shares down 4.2 pct, Agrium shares down 5.1 pct
(Adds investor reaction, updates share price)
By Michael Erman and Ernest Scheyder
NEW YORK, Aug 17 Canadian fertilizer maker
Agrium Inc (AGU.TO) again extended its hostile offer for U.S.
peer CF Industries Holdings Inc (CF.N) on Monday, disappointing
CF shareholders who had been hoping Agrium would boost its
Agrium pushed back the deadline for CF shareholders to
Sept. 22, prolonging the two companies' struggle for dominance
in the North American fertilizer market. The normally quiet
fertilizer industry has been thrust into the spotlight after
Agrium's bid for CF, which had already launched its own hostile
offer for rival Terra Industries TRA.N.
The industry has become red-hot in recent years as its
products have taken hold in developing countries seeking to
produce more food.
Arbitrage investors, who speculate on companies involved in
ongoing deals, said they were disappointed that Agrium had not
raised its price or updated them on the status of their
dealings with antitrust officials in Canada and the U.S. CF
already has antitrust approvals in both countries, and likely
would be able to close a deal with Terra quickly.
"People were hopeful they'd get an update of antitrust and
a bump," said one investor who spoke on the condition of
anonymity. "I don't think it changes a lot, but it wasn't the
outcome I wanted."
Agrium (AGU.N) has offered US $40 plus one of its own
shares for CF, which CF has rejected as much too low. Agrium's
offer, which had been due to expire on Aug. 19, valued CF at
about $4.8 billion at Friday's close.
CF shares closed down $3.45 to $79.42 on the New York Stock
Exchange, while Agrium's U.S. shares closed down $2.46 at
About 10.5 million shares had been tendered under Agrium's
bid as of the close of business on Friday, the company said.
That would represent nearly 22 percent of CF's outstanding
"Despite the fact that CF continues to ignore a clear
mandate to conclude a transaction, we will continue to press CF
to execute a mutually beneficial merger agreement," Agrium
President and Chief Executive Officer Mike Wilson said in a
"Our offer remains far superior to any alternative
articulated by CF, including remaining independent or paying a
premium for Terra."
Several arbitrage investors said they were hoping for a $5
to $10 increase in Agrium's bid, but Agrium's Wilson has said
his company will not boost its price unless the two companies
meet and CF demonstrates more value.
For its part, CF Industries said it still intends to buy
"Agrium's offer is very far from compelling, and extending
that offer is only intended as a distraction," the company said
in a statement.
The arbitrage spread for the Agrium-CF deal, a measure of
the difference between a company's share price and the price a
buyer is offering, widened to about 8 percent on Monday, after
the extension was announced, from 6.4 percent on Friday.
That is narrower than the 16 percent spread for the
CF-Terra deal, which indicates that investors are more
skeptical about that deal's prospects.
(Reporting by Matt Daily and Ernest Scheyder, Editing by
Maureen Bavdek and Carol Bishopric)