UPDATE: CF Holders Back 3 Directors Amid 3-Way Takeover Tussle

(adds vote tally, other details)

 
   DOW JONES NEWSWIRES 
 

Three CF Industries Holdings Inc. (CF) directors up for re-election were backed at the company's annual board meeting, signaling an endorsement of the fertilizer company's direction during an ongoing three-way battle in the sector.

The jockeying for position comes as fertilizer producers look to take advantage of the drop in sector stock prices since last summer to buy up production capacity ahead of an expected rebound in prices.

On Tuesday, CF Chief Executive Stephen Wilson also reiterated his commitment to acquiring rival Terra Industries Inc. (TRA) and the company's effort to rebuff Agrium Inc.'s (AGU) takeover bid.

On top of its effort to sweeten its $3.07 billion bid for Terra, CF has been on the defensive as rival Agrium last month boosted the cash portion of its $3.6 billion offer for CF. Agrium has been actively looking to build shareholder backing for the takeover while CF has continually urged that holders reject Agrium's bid, saying the deal was "grossly inadequate."

Agrium, the largest of the three companies by revenue, had urged CF shareholders to withhold their votes on the election of directors and tender their shares to Agrium's exchange offer "to send a clear message to the CF board." Agrium launched an exchange offer to CF shareholders last month, which is set to expire May 19.

The three board members up for re-election at CF were Stephen A. Furbacher, a former president and chief operating officer at Dynegy Inc. (DYN); David R. Harvey, chairman at Sigma-Aldrich Corp. (SIAL); and John D. Johnson, president and chief executive at CHS Inc. (CHSCP).

Furbacher and Harvey received more than 80% of the shareholder vote, according to a preliminary count by CF. Johnson got more than 75% of the vote.

After the vote Tuesday, Agrium put out a press release portraying the level of withhold votes as a vote of confidence for Agrium's bid for CF.

"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 Mike Wilson, Agrium's president and chief executive.

CF was quick to point out that "the number of withhold votes is not significantly different from last year's" annual meeting, according to a company release. A CF spokeswoman noted that a proxy firm had recommended a vote against Johnson because he is also a big customer of CF and therefore poses what that firm believes to be a potential conflict of interest. Also she said that Agrium owns nearly 3% of CF's shares.

CF's shares were up 1.5% to $68.33 in recent trading, as Agrium's shares rose 0.9% to $39.35. Terra's shares rose 0.4% to $27.32.

-By John Kell, Dow Jones Newswires, 201-938-5285, [e-mail]

(Lauren Etter of The Wall Street Journal contributed to this report.)