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Agrium again pleads case with disinterested takeover target CF Industries

CALGARY -- Fertilizer giant Agrium Inc.'s (TSX:AGU) quest to take over CF Industries Holdings Inc. (NYSE:CF) intensified Thursday, as the chief executive of the Calgary-based firm invited his CF counterpart to meet anytime, anywhere to discuss th...

CALGARY -- Fertilizer giant Agrium Inc.'s (TSX:AGU) quest to take over CF Industries Holdings Inc. (NYSE:CF) intensified Thursday, as the chief executive of the Calgary-based firm invited his CF counterpart to meet anytime, anywhere to discuss the US$3.8-billion offer.

In a letter addressed to CF CEO Stephen Wilson, Agrium's chief executive said his company is "100 per cent committed" to acquiring the Deerfield, Ill.-based fertilizer maker, and would be willing to raise its cash-and-stock offer if CF were to demonstrate it is worth more.

"Again, to be abundantly clear, we reiterate that the full Agrium team and our advisers remain ready to meet with you and your advisers immediately -- and at a location of your choice -- to negotiate a mutually beneficial transaction between our two companies," Michael Wilson wrote.

CF has repeatedly rebuffed Agrium's overtures, saying the takeover is an attempt to thwart CF's own hostile pursuit of U.S. rival Terra Industries Inc. (NYSE:TRA).

"Agrium's letter is blatantly inaccurate and does nothing to change the fact that Agrium's offer is grossly inadequate. Agrium's rhetoric is not a substitute for a credible offer," CF stated in response to Thursday's missive.

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On Wednesday, Agrium sent a letter to CF stockholders urging them once again to withhold their votes for three board of director nominees at the company's annual meeting next Tuesday.

"This will send a clear and strong message to CF's board and management to engage with Agrium and negotiate a mutually beneficial transaction. Voting to withhold will give you a voice in the future of your company," Agrium said in the letter.

Earlier this week, prominent proxy advisory firm RiskMetrics Group's ISS Governance Services supported CF's opposition to the bid, recommending CF shareholders re-elect the board members.

The RiskMetrics report questioned Agrium's motivation for the transaction, its commitment to taking over CF and the value of the offer.

Agrium said in the most recent letter that it has not had the opportunity to discuss the shortcomings CF says it sees in the deal, and denied accusations it only launched the bid to interfere with CF's planned takeover of Terra.

"To avoid any future confusion on your part, Agrium is 100 per cent committed to acquiring CF," Michael Wilson wrote.

"Our offer represented a premium of over 30 per cent on the date it was announced and we have since raised the cash component of our offer by 10 per cent. Furthermore, we have repeatedly indicated our willingness to pay more if CF would only meet with us and demonstrate additional value."

Agrium made its initial US$3.6-billion bid for the Deerfield, Ill.-based company in February, but the offer was made on the condition CF drop its bid for Terra.

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On March 27, Agrium bumped up the cash portion of the deal to $35 per share, which will be paid in addition to one Agrium share for each CF share.

Agrium shares were up slightly to C$49.88 on the Toronto Stock Exchange midday Thursday and to US$41.33 on the New York Stock Exchange, making the Agrium offer currently worth about US$76 a share.

CF's stock was up 1.7 per cent in New York trading to US$73.24 per share.

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