CF Industries Holdings Inc. shareholders re-elected its three board members at its annual meeting in Deerfield, Ill., April 21 by wide margins. However, Agrium Inc., which had asked CF shareholders to withhold their support from the three directors as a sign of their support for an Agrium-CF merger, also claimed victory, saying some 20 percent of the shares were withheld.
In addition, CF shareholders also ratified the selection of KPMG LLP as the company’s independent registered public accounting firm for 2009 and approved the 2009 equity and incentive plan.
“Our stockholders have voted and the message is clear – our board of directors has received overwhelming support,” said Stephen Wilson, CF chairman, president and CEO. “The board and management team remain committed to delivering stockholder value and executing our long-term business strategy.”
Stephen Furbacher, David Harvey, and John Johnson were re-elected to serve as directors for three-year terms. Harvey and Johnson have both been on the board since August 2005, and Furbacher since July 2007.
KPMG served as the company’s independent registered public accounting firm for the year ended Dec. 31, 2008.
CF said that according to the preliminary count provided by its proxy solicitor there was more than an 80 percent vote for the 2009 equity and incentive plan, as well as for ratifying KPMG. In addition, there was more than an 80 percent vote for Furbacher and Harvey, and more than a 75 percent vote for Johnson. CF said the modest increase in the number of withhold votes is not significantly different from last year’s annual meeting.
Agrium looked at the vote differently. It said its proxy solicitor, Georgeson Inc., estimates that CF stockholders withheld an average of approximately 20 percent of shares voted for the re-election of the three incumbent CF directors. Agrium says this is approximately four times the average withhold vote percentage for S&P 500 companies, which is under five percent.
“We believe the significant percentage of votes withheld for the three CF directors sends a message to CF’s board that CF stockholders want them to engage with Agrium,” said Agrium President and CEO Mike Wilson. “We will meet with CF anytime and anywhere to discuss a mutually beneficial transaction for our respective stockholders.
“Agrium remains fully committed to acquiring CF and, as we have repeatedly stated, we would be prepared to increase our offer further if CF can demonstrate additional value.”
Agrium’s current offer is $35.00 in cash and one Agrium common share for each outstanding CF share.
Agrium CFO Bruce Waterman told an analyst meeting in Toronto April 20 that if withheld votes won 20 percent of the vote it would be a victory. Later, before the CF meeting, an Agrium spokesman told Green Markets that 20 percent would be an overwhelming indication of a victory. He said that 5 percent would still send CF a message that it should negotiate with Agrium. Agrium owns over 2 percent of CF shares.
In other news, Susquehanna Financial Group LLLP issued a report April 20 seriously doubting whether any of the fertilizer mergers would actually occur. The firm said Agrium and CF appear to be too far apart in terms of price, with Agrium vowing not to overpay. In addition, it noted that Terra’s board has successfully pushed back the date of its shareholder meeting, thereby delaying any chance by CF to elect three dissident board members to the Terra board.
On Wednesday, April 22, Agrium announced that it had withdrawn its Hart-Scott-Rodino (HSR) notification and will be refiling shortly in order to provide the Federal Trade Commission with additional time to conclude its review of the proposed transaction with CF without requiring the FTC to issue a second request. Agrium said it believes the FTC has narrowed the focus of its investigation, and that Agrium remains confident that the HSR waiting period will ultimately expire without any material effect to the transaction.
On April 23, CF announced that it had withdrawn its HSR in connection with Terra, with plans to refile. CF said it remains confident that the transaction will be approved in all relevant jurisdictions.