DOW JONES NEWSWIRES
Terra Industries Inc. (TRA) again urged its shareholders to
reject rival fertilizer maker CF Industries Inc.'s (CF) $2.7
billion hostile-takeover bid, calling the all-stock offer an
"illusory proposal" in light of Agrium Inc's (AGU.T) bid to buy
CF.
Terra's board rejected CF's $20 a share bid in January, then
told its shareholders to take no action as it weighed the company's
slightly raised bid in February. At the same time, CF announced
plans to nominate three people to replace current Terra board
members up for reelection - including Chairman Henry R. Slack - and
start a share-exchange offer.
The directors on Thursday formally told its shareholders to say
no to CF's revised offer, calling it "not in the best interests of
Terra and Terra's stockholders." They added in a letter to
shareholders that the Agrium bid for CF, initially valued at $3.6
billion "makes it unlikely" its shareholders will approve CF
acquiring Terra. That presents "Terra's stockholders with what is
effectively an illusory proposal," Terra's board wrote
shareholders.
Investors in the fertilizer sector have seen a boom-and-bust
cycle over the past 18 months, with stock prices doubling on
soaring demand and prices before commodity markets reversed course
from record highs in mid-2008.
Terra shares rose 5.5% premarket to $26.67 while CF fell 1.7% to
$61.70.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com