CF Industries shareholders advised by proxy firm to pick Agrium offer

By Lisa Kerner

Charlotte, N.C., June 16 - RiskMetrics Group/ISS is recommending that CF Industries Holdings, Inc. shareholders tender their shares in Agrium Inc.'s exchange offer of $40.00 in cash plus one Agrium share per CF Industries share, Agrium announced on Tuesday.

The offer is valued at $88.20 per CF Industries share, based on Agrium's closing stock price on Monday, an Agrium news release said.

Agrium's offer expires at midnight ET on June 22.

"RiskMetrics clearly concurs that Agrium's offer provides a significant premium to CF's stand-alone stock price, is in-line with precedent deal valuations and provides CF stockholders with the attractive opportunity to 'participate in any cycle upside from the higher base provided by the offer premium,'" Agrium president and chief executive officer Mike Wilson said in a company news release.

Wilson said Agrium's offer is "far superior to any alternative articulated by CF."

While Agrium said it is prepared to immediately execute a fully financed, binding merger agreement, "CF stockholders must send an unambiguous message to CF's board by tendering their shares into our offer."

As previously reported, Agrium is prepared to walk away from a deal with CF Industries if it does not receive sufficient support from CF stockholders.

Agrium said 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.

On March 16, Agrium, a Calgary, Alta., fertilizer company, began an unsolicited exchange offer for CF Industries shares after CF Industries rejected Agrium's offer to acquire the company in favor of pursuing a deal with Terra Industries Inc.

Terra, a Sioux City, Iowa, nitrogen products company, rejected CF Industries' unsolicited offer as well as its prior offer in January.

CF Industries wants Terra

CF Industries said it remains committed to its proposed strategic business combination with Terra and extended its exchange offer for all of the outstanding shares of Terra to 5 p.m. ET on June 26 from 5 p.m. ET on June 12.

"We are in the process of complying with a request for additional information from the Federal Trade Commission and are confident that we will receive regulatory clearance in the near-term," CF Industries chairman, president and CEO Stephen R. Wilson said in a news release on Tuesday.

"In addition to the clear inadequacy of Agrium's offer, our board continues to be concerned with a number of risks associated with a potential combination with Agrium, including those related to value and timing of any transaction as a result of the ongoing regulatory review and potential remedies that may be required," he said.

According to CF Industries, it has heard "a consistent message" from its stockholders that Agrium's offer substantially undervalues the company.

CF Industries believes its shares would be trading "at least in the mid- to upper-$70's per share" without the Agrium offer.

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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