CF Industries' shareholders advised to accept Agrium offer

17 November 2009 14:54  [Source: ICIS news]

SINGAPORE (ICIS news)--New York-based proxy advisory firm RiskMetrics has advised the shareholders of US fertilizer company CF Industries to accept the final $4.9bn (€3.3bn) take-over offer made by Canadian Agrium.

Agrium announced RiskMetrics’ recommendation on Tuesday on its offer that values CF at an equivalent price of $98.78 per share. The offer will expire Wednesday midnight (New York time).

The publicly-listed Canadian company offered $45/share plus one common share of the company for each CF stock. Agrium closed at $53.78 a share on Monday at the New York Stock Exchange.

The offer represents a 78% premium to CF’s closing price on 24 February 2009, a day before Agrium made its initial proposal to acquire the company, it said.

RiskMetrics criticized CF's board for trying to block the successful conclusion of Agrium/CF deal in order to pursue the acquisition of another fertiliser company - Terra.

"Given the extraordinary nature of the CF board's 'end run' around its own shareholders, we remain concerned about the accountability of the CF board going forward...and here we frankly cannot confirm that due consideration was given to the June tender results by the CF board," Agrium said quoting the RiskMetrics' report.

RiskMetrics cited that a majority of CF shareholders sent a strong message to its own board that they welcome a new business strategy.

"However, over the subsequent five months, it does not appear that the CF board has changed from its pre-referendum strategy in any meaningful way. CF continues to stonewall Agrium and pursue its acquisition of Terra (a transaction on which CF shareholders will have no say)," Agrium said, quoting the advisory firm's report.

Agrium president and CEO Mike Wilson said: "Our offer is CF stockholders' final opportunity to make it clear to the CF board that they want to receive a premium rather than pay one.”

“With support for an Agrium/CF combination from a resounding majority of CF stockholders, we expect the CF board will do the right thing and move forward with Agrium's offer,” he said.

“If CF refuses to act, Agrium will consider all options, including nominating a slate of directors to the CF board and pursuing litigation," Wilson said.

A spokesperson for CF Industries said: "CF Industries continues to believe that Agrium has failed to make a compelling offer."

($1 = €0.67)

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By: Pearl Bantillo
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