Agrium Inc. said Dec. 2 that it intends to nominate a slate of directors to stand for election at CF Industries Holdings Inc.’s 2010 annual stockholder meeting. Agrium has also challenged CF to remove their poison pill and allow CF stockholders to decide whether to accept Agrium’s offer.
In a letter to CF board members, Agrium said time is overdue for the CF board to remove preclusive barriers and let its stockholders decide for themselves whether to accept Agrium’s offer. Agrium said it remains open to discussion, including possible modifications to the structure of the offer.
Agrium told Green Markets it plans to nominate two directors to the CF board and expects to release their names soon. CF said it has not set a time or place for its next shareholder meeting, but that it will be in late spring 2010. CF has two of its eight board seats up for reelection in 2010. It said that under Delaware law it would need a shareholder vote to expand the number of board members.
In the meantime, CF management continues to pursue Terra Industries Inc. On Dec. 1, CF said it has exercised its right to extend to Dec. 31, 2009, the $2.5 billion of financing commitments for the acquisition of Terra. CF said it does not have any right to extend the financing commitments beyond Dec. 31 unless a merger agreement with Terra is signed by that date.
“By electing our slate of directors at the annual meeting, the Terra stockholders sent a clear message that they want a sale of Terra in the near term and that the price we have offered forms the basis for final negotiations,” said Stephen Wilson, CF chairman, president, and CEO. “This has been confirmed to us in recent conversations with Terra stockholders. We are committed to moving forward with the acquisition of Terra.”
Also on Dec. 1, Terra announced the final voting results for Terra’s 2009 annual meeting of shareholders held Nov. 20. Based on the results certified by the independent Inspector of Elections, Terra shareholders elected CF’s three nominees to Terra’s board – John Lilly, president of John Lilly Strategic Insights LLC and former CEO of The Pillsbury Co.; David Wilson, president and CEO of the Graduate Management Admission Council and former managing partner at Ernst & Young LLP; and Irving Yoskowitz, senior counsel at Dickstein Shapiro LLP and former executive vice president and general counsel of Constellation Energy Group Inc.
All three were elected and qualified to serve as Class II directors until Terra’s 2012 annual meeting. Terra said of the 84,332,541 shares represented at the meeting, the three received votes representing approximately 38 percent of the outstanding Terra shares, excluding CF’s vote, while Terra’s nominees received votes representing approximately 36 percent of the outstanding Terra shares.
“Terra’s board and management team look forward to working constructively with our new directors to continue enhancing value for all Terra shareholders,” said Michael Bennett, Terra president and CEO. “Terra’s robust near- and long-term prospects position the company to continue implementing its strategic growth initiatives amidst an anticipated upsurge in demand and profitability from our agricultural and industrial customer base.”
Soon after the Terra shareholder meeting, the company announced its intent to expand board membership from eight to 11, with the additional slots going to the Terra board members who would have otherwise exited the board due to the election of the CF nominees (GM Nov. 30, p. 1).