May 14, 2009 / 11:13 PM / 10 years ago

Agrium asks CF shareholders to pressure the board

* Calls on CF shareholders to pressure its board

* Reiterates commitment to bid for CF Industries

By Euan Rocha

TORONTO, May 14 (Reuters) - Agrium Inc AGU.TO, which has launched a hostile bid for U.S. rival CF Industries (CF.N), on Thursday asked CF’s shareholders to pressure their board of directors into negotiating a deal with Agrium.

The Canadian fertilizer maker and agricultural products retailer initially launched its bid for CF Industries in February. CF rejected the initial offer and a sweetened bid that was proposed in March, arguing that both offers substantially undervalued their company.

Agrium, on Monday, raised its bid a second time and its latest offer values CF at about $4.18 billion — CF has yet to respond to the latest bid.

“I’m hoping that we hear back from CF and that they say this bid of yours is a fair bid, let’s sit down and talk — that would be very pleasant. If they don’t, we need you as shareholders to give them a call and say, what are you doing,” Agrium’s Chief Executive Mike Wilson, said on Thursday.

CF, which has said its board will review the revised bid, has also claimed that Agrium’s bid is merely a ploy to foil CF’s own bid for its rival Terra Industries TRA.N. Terra has thus far rejected CF’s bid and refused to negotiate.

Wilson hit out at critics, who argue that if Agrium were serious about their offer they would have proposed a slate at CF’s shareholder meeting earlier this year.

“I’ve been very clear. The reason we didn’t put forward a slate is we didn’t have our financing committed at the time ... We got the financing about 12 days later and moved within 24 hours,” said Wilson, while addressing investors at the BMO Agriculture, Protein and Fertilizer Conference in New York, which was being webcast.

Wilson disagreed with a recent newspaper report, which suggested that Agrium were unlikely to succeed in their bid for CF.

“We have a very good value on the table. We are determined, we are committed. We don’t hire bankers and get $1.4 billion in financing lined up just to entertain ourselves,” said Wilson.

However, Agrium is not in a position to force a deal, as CF’s board have a poison pill, which they can utilize to scuttle any unfriendly deal.

“If you look at the arbitrage spread it’s fairly high right now. There’s a great way to narrow that spread. Just take the poison pill off and talk to us,” said Wilson, in reference to the spread between Agrium’s offer price and the price at which CF’s shares are trading.

Agrium is offering CF shareholders $40 in cash plus one Agrium share for each CF share. Based on Thursday’s closing prices for shares of both companies — Agrium is offering CF shareholders $86.92 a share, which is well above the $77.68 level at which CF’s shares closed on Thursday.

Wilson argued that Agrium is offering CF shareholders a much more significant premium, than the one that CF is offering Terra’s shareholders.

“CF has gone public and said Terra should engage with them, that they have a fair offer on the table for Terra and they don’t understand, why Terra won’t talk to them,” said Wilson. “Our view is that if what you (CF) offered Terra is fair and they should talk, then you (CF) should be talking to us.”

Wilson denied that Agrium’s bid is merely a gambit to derail a possible CF-Terra deal.

“To warp it up, we are determined. Are we in here to muddle up something? No. Are we really serious? Absolutely. Do we want this to cross the line? Absolutely.” (Reporting by Euan Rocha; editing by Carol Bishopric)

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