February 19, 2010 / 1:50 PM / in 8 years

UPDATE 2-Agrium extends offer for CF Industries

* Says remains committed to acquiring CF

* Says Yara-Terra deal shows importance of size/scale

* 26 pct of CF’s stock currently tendered in favor of bid (Adds dateline, details, background)

TORONTO, Feb 19 (Reuters) - Agrium Inc (AGU.TO) extended its offer to acquire U.S. rival CF Industries by a month on Friday, prolonging an almost year-long battle between the two fertilizer companies.

Agrium’s offer of $45 in cash plus an Agrium share for every CF share, is now set to expire on March 22. The previous expiration date was Feb. 22.

A year ago Agrium bid $3.6 billion to acquire its smaller rival and since then Agrium has repeatedly sweetened its offer, which is now worth roughly $5.4 billion. [ID:nN16211789]

CF Industries, which itself only recently withdrew its hostile takeover bid for rival Terra Industries TRA.N, has been unswayed by the offer and argues that it substantially undervalues the company.

Calgary, Alberta-based Agrium plans to launch a proxy battle against CF and has chosen two nominees for election to CF’s board later this year. The date of CF’s annual meeting of stockholders in 2010 has yet to be finalized.

“Agrium remains fully committed to acquiring CF and will proceed with the nomination of two highly qualified, independent individuals to CF’s board of directors,” Agrium Chief Executive Mike Wilson said in a statement.

Earlier this week, Norway’s Yara (YAR.OL) agreed to acquire Terra for about $4.1 billion, in a move to cement its position as the world’s largest producer of nitrogen-based fertilizers. [ID:nLDE61E1PM]

Wilson said the Yara-Terra deal illustrates the benefits of being part of a larger, global company. “We believe CF will recognize this as well,” he added.

Agrium said that about 12.5 million, or 26 percent, of CF’s outstanding common stock had been tendered to its offer and not yet withdrawn as of Thursday.

CF’s shares were up 2.4 percent at $104.45 in midday trade on Friday on the New York Stock Exchange, while those of Agrium were up 6 cents at $66.05 . (Reporting by Euan Rocha in Toronto and Ashutosh Joshi in Bangalore; editing by Peter Galloway)

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