Agrium threatens to walk from CF Industries deal

Agrium Inc. said Tuesday it will walk away from its proposed takeover of CF Industries Holdings Inc. if a "compelling majority" of the fertilizer maker's shareholders don't sign off on the deal.

"We have made our best and final offer," Mike Wilson, Agrium's president and chief executive, said in a statement. "We will continue to press CF if we receive a compelling majority of shares tendered, but we will walk from the transaction if we do not."

To bolster its argument, Agrium touted a study by advisory firm RiskMetrics Group on Tuesday that recommended CF Industries shareholders approve the deal.

Canada-based Agrium is offering $40 per share, as well as a one-for-one share swap, an offer that it says represents a 59 percent premium to CF's closing price before the offer was first made public on Feb. 24.

The agricultural products company has been trying to buy Deerfield, Ill.-based CF Industries for months, but its offers have been repeatedly rejected as inadequate, even after the deal was sweetened several times.

After reaching an impasse with CF Industries' board in March, Agrium took its offer directly to shareholders.

"We are prepared to execute immediately a fully financed, binding merger agreement, but CF stockholders must send an unambiguous message to CF's board by tendering their shares into our offer," Wilson said Tuesday.

Meanwhile, CF Industries is trying to buy Terra Industries Inc., and has launched a fight to unseat that company's board.

"We are committed to continuing to pursue a business combination with Terra Industries, which we believe will create superior value for CF Industries stockholders and provide a significantly better growth platform than a combination with Agrium," Stephen R. Wilson, chairman, president and CEO of CF said late Tuesday.

Wilson said the company is in the process of complying with a request for additional information from the Federal Trade Commission and is "confident that we will receive regulatory clearance in the near-term."

Shares of Agrium fell $1.97, or 4.1 percent, to close Tuesday at $46.23, while shares of CF industries Holdings Inc. fell $1.31 to finish at $78.70.