Thursday, fertilizer manufacturer, CF Industries Holdings, Inc. (CF) said that it has withdrawn its offer to acquire Terra Industries Inc. (TRA) and that it is no longer pursuing the acquisition. CF Industries also said that it has sold all its Terra shares, with a net gain, including dividends, that more than offset the expenses it has incurred in connection with the proposed acquisition.
Deerfield, Illinois-based CF Industries also said that with the current capitalization and expected strong cash flow in 2010, it will continue to evaluate its full range of capital deployment opportunities including strategic investments and returning capital to stockholders.
Stephen Wilson, chairman, president and chief executive officer said, "It is clear that an acquisition of Terra now would require a significant increase in our offer, given the substantial uplift in equity values in the fertilizer sector. While the strategic merits of a transaction are undeniable, it is not in the best interests of CF Industries stockholders to increase our offer to the level that we believe now would be required for Terra to agree to an acquisition."
Since January 2009, CF Industries has made several separate proposals to acquire Terra, each of which was unanimously rejected by Terra board. Earlier, at the 2009 annual meeting, Terra's shareholders elected three CF nominees to the board after CF fought to unseat Terra's board. The last proposal to buy Terra for $29.25 per share in cash plus 0.1034 of a share of CF common stock per Terra share was rejected by Terra, saying that the offer undervalues Terra.
Separately, agricultural nutrients maker, Agrium Inc. (AGU, AGU.TO) said that it will nominate two independent and highly qualified directors for election to CF board of directors at CF's 2010 annual meeting of stockholders. Agrium notified CF Industries its intentions to seek CF stockholders approval for a resolution requesting that the CF board redeem CF's poison pill.
The two nominees from Agrium are Kenny Cordell, former Chairman and Chief Executive Officer of United Agri Products and Michael Ducey, current Director and Chairman of the Audit Committee of Verso Paper Holdings Corp., and Non-Executive Chairman of the Board of Texas Petrochemical, Inc.
Calgary, Alberta-based Agrium also announced that it is extending the expiration date of its offer to acquire CF for $45.00 in cash plus one Agrium share per CF share until February 22 from the earlier date of January 22. As of January 13, about 13.8 million shares of CF Industries outstanding common stock had been tendered into and not withdrawn from the exchange offer.
"We remain fully committed to acquiring CF and believe the CF board of directors has failed to uphold its stockholders' interests by continuing to ignore Agrium's strategically and financially compelling offer, currently valued at $110.32 per CF share," said Mike Wilson, Agrium's president and CEO.
Agrium, which has launched a hostile takeover bid for CF, on December 23, 2009 said that Federal Staff Commission or FTC has granted an early termination of the waiting period under the HSR Act in connection with the proposed acquisition and has accepted for public comment the previously announced Consent Agreement between Agrium and the FTC staff.
The company has been approaching CF with buy-out offers since the beginning of the year, while CF has been pursuing its Sioux City, Iowa-based rival Terra, which it withdrew earlier today. It is expected that a combination of any two of these three companies would create one of the world's biggest nitrogen fertilizer producers.
CF closed Thursday's regular trading session at $93.19, down $1.73 or 1.82% and TRA closed trading at $32.66, up $0.05 or 0.15% on the NYSE. AGU closed today's regular trading at $65.32, down $2.15 or 3.19% on the NYSE. AGU.TO closed trading at $66.90, down $2.78 or 3.99% on the Toronto Stock Exchange.
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