June 23, 2009 / 12:16 PM / 10 years ago

UPDATE 4-Agrium to push ahead with bid for CF

* 62 percent of CF shares tendered to Agrium

* Agrium CEO says no plans to raise bid

* CF shares up 2.5 percent (Adds Agrium CEO comment, CF comment, updates share price, adds byline)

By Michael Erman

NEW YORK, June 23 (Reuters) - Fertilizer maker Agrium Inc AGU.TO said on Tuesday it would push ahead with its hostile bid for rival CF Industries Inc (CF.N) after the offer was backed by holders of more than 60 percent of CF’s stock.

About 30.14 million CF shares, or 62 percent of the total outstanding, were tendered to Agrium as of the suitor’s Monday night deadline. Agrium said it was extending the deadline by a month, through July 22.

Although a majority of CF shareholders tendered their shares in the offer, CF has a poison pill and other defense mechanisms in place that would prevent Agrium from being able to complete the deal.

Agrium Chief Executive Michael Wilson said on Tuesday his company has no plans to raise its bid for CF unless the company agrees to meet and can demonstrate additional value.

“We’ve been very clear throughout that this is a full and fair offer,” Wilson said in an interview. “There should be no doubt in anyone’s mind what this tender means.”

CF shares rose $1.75, or 2.5 percent, to $71.07 in morning trading on the New York Stock Exchange, well below Agrium’s cash-and-stock bid of $79.08 per share.

The arbitrage spread for the deal — a measure of the difference between a company’s share price and the price a buyer is offering — is more than 10 percent. A spread of that size indicates investors doubt the deal will close.

Agrium, a Canadian company, originally proposed to take over smaller U.S. rival CF in February and has twice sweetened its offer. It missed a deadline to put a slate of directors up for election at CF’s annual meeting earlier this year, a move that would have given Agrium more leverage in the deal.

Earlier this month, Agrium said it would withdraw its bid if it did not receive support from a “compelling majority” of CF shareholders by the Monday night deadline.

It is currently offering $40 in cash and one common share for each CF share, which values CF at around $3.8 billion.

CF has repeatedly rejected Agrium’s overtures, contending the offer substantially undervalues the company. CF is locked in its own hostile takeover bid for Terra Industries Inc TRA.N and has characterized Agrium’s bid as an attempt to scuttle that deal.

CF CEO Stephen Wilson said in a statement on Tuesday, “Contrary to Agrium’s assertions, the tender offer 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.” (Additional reporting by Euan Rocha in Toronto; editing by John Wallace)

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