In its latest maneuver to acquire a rival in the fertilizer business, Agrium Inc. said Wednesday it plans to nominate a slate of candidates for election to the CF Industries Holdings Inc. board next year.
The Canadian company also challenged CF to remove an anti-takeover defense known as a poison pill and allow CF stockholders to decide whether to accept Agrium's offer.
Last month, in a nonbinding tender offer, Agrium said that shareholders controlling 62 percent of CF Industries stock backed its $5 billion buyout offer. CF Industries' management has opposed the offer.
The poison pill is in place at CF to block unwanted takeovers and makes it difficult for Agrium to succeed in its takeover without Agrium's management being persuaded on the deal as well. If the poison pill is triggered by Agrium acquiring the tendered shares, current shareholders get a chance to buy more shares at a bargain price, making a takeover prohibitively expensive.
Agrium's offer includes $45 in cash and one Agrium common share per CF share.
Agrium's move to grab CF board seats is the latest development in the fertilizer industry's takeover tussle, which began when CF made its first $3.6 billion bid for another rival fertilizer company Terra Industries Inc. in January.
A month later, Agrium offered to buy CF in an effort to block CF's effort to buy Terra. Agrium's offer is conditioned on CF stopping its pursuit of Terra.
The industry's hunger for consolidation intensified at the start of the year when fertilizer company share prices had been beaten down. As the economy declined, struggling farmers scaled back demand for fertilizer, driving down prices that fertilizer companies charge as well as the price of their shares.
Share prices have since recovered with an improving outlook for the industry, but still remain far below last year's levels.
Shares of Agrium rose $3.14, or 5.5 percent, to $60.11 Wednesday after rising to a 52-week high of $60.57 earlier in the session. CF shares climbed $4.37, or 5.1 percent, to $90.27. Terra shares were unchanged at $39.