Canadian fertilizer giant Agrium is urging the shareholders of U.S. fertilizer firm CF Industries to show support for Agrium’s hostile takeover bid by not voting for CF’s proposed new directors.
Chicago-based CF Industries, whose holdings include a major nitrogen fertilizer plant at Medicine Hat, Alta., has so far urged its shareholders to reject Agrium’s marriage proposal, which currently includes US$35 and an Agrium common share for every CF common share tendered.
CF’s board has rejected Agrium’s offer, describing it as transparent interference in CF’s own hostile bid for another U.S. fertilizer firm, Terra Industries.
Agrium, in a letter mailed Monday to CF shareholders, claims CF’s board is proposing a “highly unusual structure” to try to acquire Terra, whose holdings include a major nitrogen fertilizer facility at Courtright, Ont.
“As required by the rules of the New York Stock Exchange, CF’s initial offer for Terra was expressly conditioned on your approval. However, in response to Agrium’s offer, CF changed course in midstream,” the company wrote, and CF’s bid for Terra now includes both non-voting preferred and common stock.
“This structure was designed for one purpose only: to take away your right to vote on a CF/Terra combination and thus, by implication, on (Agrium’s) offer,” Agrium CEO Mike Wilson wrote in the letter.
CF’s equally hostile takeover bid for Terra, which the Iowa company has also rejected, is currently an all-stock offer worth about US$30.50 per share.
“If you are against this ‘end run’ around CF stockholders, we urge you to withhold (emphasis Wilson’s) your vote for Stephen A. Furbacher, David R. Harvey, and John D. Johnson, CF’s three nominees for re-election as directors” at CF’s annual shareholders’ meeting April 21, Wilson wrote.
Withholding votes would involve shareholders voting their green proxy cards, or directing brokers, banks, trust companies or agents to do so on shareholders’ behalf.