Agrium brings exchange offer to CF Industries shareholders

By Lisa Kerner

Charlotte, N.C., March 16 - Agrium Inc. began its exchange offer for CF Industries Holdings, Inc. after CF Industries refused to enter into discussions.

"CF Industries' refusal to engage in discussions with Agrium left us with no choice but to take our offer directly to CF stockholders," said Agrium president and chief executive officer Mike Wilson in a news release.

Under Agrium's offer, CF Industries stockholders will receive $31.70 in cash and one common share of Agrium for each CF Industries share.

CF Industries stockholders also have the option of electing to receive either 1.7866 common shares of Agrium or $72.00 in cash, subject to proration, for each CF Industries share held.

Agrium said not more than 44% of the shares tendered will be exchanged for cash and not more than 56% of the shares tendered will be exchanged for Agrium common shares.

The exchange offer will expire at midnight ET on May 19.

According to Agrium, it has sufficient cash resources and committed financing underwritten by Royal Bank of Canada and the Bank of Nova Scotia to fund the cash portion of the offer.

RBC Capital Markets is acting as dealer manager, and Georgeson Inc. is the information agent in connection with the offer.

CF Industries pursues Terra offer

Agrium, a Calgary, Alta., fertilizer company, conditioned its proposal upon CF Industries' termination of its exchange offer for Terra Industries Inc.

On March 9, CF Industries' board of directors rejected Agrium's offer to acquire the company and reaffirmed its intention to move forward with a business combination with Terra.

As previously reported, CF Industries said it would agree to an exchange ratio based on $27.50 for each Terra share, with an exchange ratio of not less than 0.4129 of a CF Industries share and not more than 0.4539 of a CF Industries share.

Terra had rejected CF Industries' offer of a fixed exchange ratio of 0.4235 of a CF Industries share for each Terra share. The Sioux City, Iowa, nitrogen products company also rejected CF Industries' unsolicited offer in January.

CF Industries said it would structure the transaction so that a vote by CF Industries stockholders would not be necessary.

"We believe CF Industries' restructuring of its offer for Terra to circumvent a vote by its own stockholders highlights their belief that CF Industries would lose a stockholder vote and demonstrates a disregard for the rights of their stockholders," Wilson said in the release.

CF Industries filed preliminary proxy materials with the Securities and Exchange Commission to nominate three independent directors to replace members of Terra's board of directors at Terra's 2009 annual stockholders meeting.

Deerfield, Ill.-based CF Industries Holdings is the holding company for CF Industries, Inc., a producer and distributor of nitrogen and phosphate fertilizer products.

Mentioned in this article:

Agrium Inc. NYSE: AGU

CF Industries Holdings, Inc. NYSE: CF

Terra Industries Inc. NYSE: TRA

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