Agrium to raise $1.25 billion in stock sale

Calgary-Agrium Inc. said Dec. 12 that it has entered into an agreement to issue 21,551,700 common shares at a price of $58.00 per share, representing gross proceeds of approximately $1.25 billion. The company intends to use the net proceeds from the offering to fund a portion of the purchase price of its previously announced cash tender offer for all of the outstanding shares of common stock of UAP Holding Corp. (GM Dec. 10, p. 1). The company estimates that the aggregate cash consideration for the acquisition of UAP will be approximately U.S. $2.15 billion, plus indebtedness of UAP to be assumed or refinanced. The company also plans to borrow under available credit facilities to pay the balance of the purchase price for UAP and to refinance certain indebtedness of UAP and its subsidiaries. The acquisition of UAP is expected to be completed in early 2008. The shares are being offered through a syndicate of underwriters, with RBC Capital Markets acting as lead manager and bookrunner, Merrill Lynch & Co., Scotia Capital Inc., and UBS Securities Canada Inc. acting as co-lead managers, and including BMO Nesbitt Burns Inc., Credit Suisse Securities (Canada), Inc., National Bank Financial Inc., CIBC World Markets Inc., and TD Securities Inc. Agrium granted underwriters an option exercisable for a period of 30 days after closing to purchase up to an additional 2,155,100 common shares at $58.00 per share to cover over-allotments, if any. Should the option be exercised, proceeds could be $1.375 billion. It expects the offering to close on or about Dec. 18. 2007. The common shares were offered pursuant to a preliminary prospectus supplement under the company’s short form base shelf prospectus dated Aug. 22, 2007, and the company’s related effective registration statement on Form F-10. The preliminary prospectus supplement was filed Dec. 10 with the Canadian securities regulatory authorities in each of the provinces of Canada and with the U.S. Securities and Exchange Commission under the multi-jurisdictional disclosure system. On Dec. 3, 2007, the company filed an amendment to such short form base shelf prospectus to increase the maximum amount of securities that may be offered thereunder from $1 billion to $3 billion.