December 2, 2009 / 1:03 PM / 9 years ago

RPT-UPDATE 3-Agrium to nominate slate to CF board

(Repeats to widen distribution)

* To nominate slate for CF’s 2010 shareholder meeting

* Challenges CF’s board to drop its poison pill

* Agrium, CF stock both up more than 3 pct (Adds details, CF comments, share price moves; in U.S. dollars unless noted)

By Euan Rocha

TORONTO, Dec 2 (Reuters) - Canadian fertilizer producer Agrium Inc AGU.TO, which has been locked in a hostile battle to acquire its U.S. rival CF Industries (CF.N), said on Wednesday it plans to nominate a slate of directors to stand for election at CF’s 2010 annual stockholder meeting.

Calgary, Alberta-based Agrium said it has also challenged CF to remove its poison pill to allow CF shareholders to decide whether to accept Agrium’s takeover offer.

CF has been fending off Agrium’s overtures since February, while it is itself locked in a hostile battle to acquire U.S. rival Terra Industries TRA.N.

Agrium, which is also the largest North American agricultural products retailer, is offering $45.00 in cash plus one of its shares for each CF share in what the company has called its best and final offer. This implies a deal value of $101.97 per CF share, or $4.96 billion, based on Agrium’s closing stock price on Tuesday.

Agrium has extended its offer for CF until Dec. 18. The bid is contingent on CF dropping its pursuit of Terra.

CF has yet to announce a date for its shareholder meeting in 2010. Agrium missed the deadline to nominate a slate to CF’s board at this year’s meeting, which was held in April.

About 62 percent of CF’s shareholders voted in favor of the Agrium proposal in a tender offer last month, but Deerfield, Illinois-based CF has a poison pill and other defense measures in place to prevent Agrium from forcing a deal.

In a letter to the board of CF, which is incorporated in state of Delaware, Agrium said CF’s reliance on a poison pill and Delaware law to block a transaction desired by shareholders is unreasonable.

“The time is overdue for you to remove these preclusive barriers and let your stockholders decide for themselves whether to accept Agrium’s offer,” it said in the letter.

However, CF countered that “nothing Agrium says changes the fact that its offer is far from compelling.”

CF itself just won a proxy battle against Terra, when its three nominees were elected to Terra’s board in November. However CF does not have a majority on Terra’s board and it is still not in a position to force a deal with Terra.

The nearly year-long, three-way takeover battle between Agrium, CF and Terra has led some investors to label the tussle as the “Fertilizer Wars,” or the “Ultimate Fertilizer Championship.”

Agrium shares were up 3.9 percent at $59.20 on Wednesday morning on the New York Stock Exchange and ahead 3.6 percent at C$61.85 in Toronto. CF stock was up 3.4 percent at $88.77 in New York.

$1= $1.04 Canadian Reporting by Euan Rocha, editing by Rob Wilson euan.rocha@thomsonreuters.com; +1 416 941 8185; Reuters Messaging: euan.rocha.reuters.com@reuters.net

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