CF Industries raises offer for Terra to $4.58 billion

Even as Agrium Inc announced its plans to nominate a slate of directors for CF Industries Holdings Inc's board next year even in pursuit of its hostile takeover bid, CF Industries yesterday raised its offer once again to acquire rival Terra Industries Inc. by $4.75 in cash per share.
 
The $36.75 cash portion of the offer includes the $7.50 per share dividend declared by Terra bringing the value of the hostile takeover bid to $4.58 billion.
 
CF Industries is now offering to acquire Sioux City, Iowa-based Terra for $36.75 in cash and 0.1034 a share of CF Industries common stock for each Terra share. The offer has a value of $45.91, based on the CF Industries closing price as of Friday, 4 December 2009.
 
In January 2009, Deerfield, Illinois-based CF Industries offered to buy rival Terra Industries Inc for $2.1 billion in stock, a combination that would create a leading global fertiliser producer. (See: Fertiliser maker CF Holdings makes $2.1 billion bid for rival Terra Industries)  

The offer was 0.4235 of a CF share for each Terra share held, a 23 per cent premium.
 
But only a day after CF Industries officially launched its hostile offer for Terra, the hunter became the hunted, when Calgary, Canada-based Agrium Inc launched a $3.6 billion bid to acquire CF Industries. (See: Hostile bid for Terra lands CF Industries in Agrium's crosshairs) 
 
Stephen Wilson, chairman, president and chief executive officer of CF Industries said yesterday, "We have made a compelling offer, which represents more than a 50 per cent premium to what we believe would be the unaffected trading price for Terra. It is time to sign a merger agreement and put these two great companies together."
 
Terra said in a statement it had received the new proposal and would review it at a board meeting scheduled for later this week.
 
In March, CF Industries sweetened its deal to Terra and offered $27.50 for each Terra share with an exchange ratio between 0.4129 and 0.4539 of a CF Industries share.
 
The CF-Terra takeover battle with Agrium stepping in has become a complicated war and last week, Agrium said it plans to nominate its own slate of directors for election at CF's next annual shareholder meeting.
 
Founded in 1946 as a fertilizer brokerage operation by a group of regional agricultural cooperatives, CF Industries grew by expanding its distribution capabilities and diversifying into fertilizer manufacturing.
 
It operates nitrogen fertilizer manufacturing complexes in Donaldsonville, LA and Medicine Hat, Alberta; phosphate mining and production operations in Central Florida; and a network of fertilizer distribution terminals and warehouses, located primarily in major grain-producing states in the US Midwest. It also owns a 50 per cent interest in Keytrade AG, a global fertilizer trader headquartered in Switzerland.
 
Its 2008 revenue was more than $3.9 billion. Its share of the fertilizer market in key Corn Belt markets is 28 per cent for nitrogen and 18 per cent for phosphate.
 
Terra Industries produces and markets nitrogen and methanol products for agricultural and industrial markets in North America and the UK. It sells its products to national agricultural retail chains, farm cooperatives, independent dealers, and industrial customers.