DOW JONES NEWSWIRES
CF Industries Holdings Inc. (CF) said Wednesday its board was
prepared to increase its takeover bid for rival fertilizer company
Terra Industries Inc. (TRA) if the two companies could reach a
merger agreement.
The potential boost, which would be the second for CF, is the
latest move in a three-way battle in the industry that has been
going on for months.
CF itself is the subject of a takeover attempt by a third
fertilizer maker, Agrium Inc. (AGU), which has said in recent weeks
it will continue the effort despite CF shareholders pulling their
shares back in droves. Agrium had threatened to walk away from that
$3.7 billion buyout effort if enough CF holders didn't show support
by a June deadline. But holders did, keeping Agrium on the field
for the time being.
CF has repeatedly rejected Agrium's approaches, instead pushing
for its takeover of Terra. But Terra has repeatedly said no to CF,
which launched its effort at the start of the year and boosted its
bid in March. There has been strong pressure in the industry to
consolidate after prices plunged from last year's highs.
Stephen Wilson, chairman and chief executive of CF, said
Wednesday his company continues to believe a merger with Terra is
in the interests of both companies' holders.
CF said it is prepared to boost its bid for Terra to 0.465 CF
share for each Terra share - compared with its prior bid of a range
between 0.4129 and 0.4539 share. The new offer values Terra at
$37.20 each, more than double its closing price before CF's first
offer was announced. Terra closed Tuesday at $28.85.
At the new offer level, the deal would be worth $3.71
billion.
CF's board also said it is prepared to return at least $1
billion in cash to stockholders of the combined company after the
transaction closes, likely through open-market purchases or a
self-tender offer. It said it would also give out 5 million
contingent future shares to CF stockholders, which would be
converted into CF common shares if the stock trades at more than
$115 a share in a certain period after the consummation.
The tender offer deadline was extended to 5 p.m. EDT, Aug. 21;
it had been set to expire Friday.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com
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