Mike Wilson, Agrium CEO
Calgary-based Agrium Inc. is taking steps to remove directors at CF Industries Holdings who have been blocking the Canadian fertilizer company's hostile takeover bid for the Illinois-based company since February.
Calgary-based Agrium said Wednesday it will nominate a slate of directors for election at CF's 2010 annual meeting and has challenged CF's current board to allow shareholders to decide whether they want to accept the takeover offer.
Agrium didn't identify its nominees in the announcement.
In a letter to CF's Board, Agrium also called on CF to remove a "poison pill" provision that is meant to protect shareholders in the event of a hostile takeover.
Agrium has said it already has about 62 per cent of CF's outstanding shares tendered to its offer of US$45 in cash plus one Agrium share for each CF share. That offer expires midnight Dec. 18.
Based on Agrium"s closing price of $56.97 (U.S.) in New York on Tuesday, its offer values CF at about $4.95-billion.
"Unfortunately to date, CF has declined all opportunities to engage directly with Agrium or its advisers," wrote Michael Wilson, Agrium's president and chief executive officer, in a letter to CF's board.
"The time is overdue for you to remove these preclusive barriers and let your stockholders decide for themselves whether to accept Agrium's offer."
Mr. Wilson added that CF's continued reliance on the poison pill provision which can remain in effect indefinitely in most U.S. jurisdictions, was "unreasonable."
Agrium added that it was open to discussing possible modifications to its offer with CF.
Last month, Agrium had increased the cash portion of its takeover bid by $5 per share, declaring it the "best and final" offer for the Deerfiled, Ill. based nitrogen and phosphate producer.
The offer, like its predecessors, was dismissed by CF, which is caught up in its own hostile takeover battle for more specialized fertilizer company Terra Industries Inc.
In late November, three CF nominees were elected to the Terra board after the company rejected CF's most recent cash-and-stock offer which valued Terra at $4.1-billion.
Agrium's offer for CF is conditional on it dropping the attempt to buy Terra.