CF Industries to nominate three directors for Terra board, to start exchange offer for Terra stock

New York, Feb. 3 - CF Industries Holdings, Inc. announced it will nominate three directors at Terra Industries Inc.'s 2009 annual meeting and also said it will start an exchange offer for Terra stock.

CF's move comes despite a rejection of its unsolicited offer by the board of Terra Industries.

"We believe this is the best way to advance this transaction," said Stephen R. Wilson, chairman, president and chief executive officer of CF Industries, in a news release.

"While we believe the Terra stockholders will support a combination by voting for our nominees, our preference continues to be to enter into a negotiated transaction.

"We are confident that our offer represents full and fair value and continue to believe that a combination of the two companies would provide significant benefits to both CF Industries and Terra constituents. Our proposal has been received very positively by the market."

In response, Terra rejected its Jan. 29 rejection of CF's bid and said its board, "with the assistance of its financial and legal advisors and after a comprehensive review, unanimously concluded that CF's proposal does not present a compelling case to create additional value for the shareholders of either company, and that it substantially undervalues Terra on an absolute basis and relative to CF."

It added: "Since then, many of Terra's major shareholders have expressed to Terra their disinterest in CF's proposal and their support of Terra's strategy.

"Terra's board and management remain committed to enhancing shareholder value by continuing to execute our strategic plan which we believe will deliver significantly more value to shareholders than CF's proposal."

CF's offer, the basis for the planned exchange, is 0.4235 CF shares for each Terra share. The company said it plans to start the exchange offer at the middle of the month.

CF will nominate to Terra's board: John N. Lilly, former CEO of Pillsbury Co., David A. Wilson, president and chief executive officer of the Graduate Management Admission Council and former managing partner at Ernst & Young LLP, and Irving B. Yoskowitz, former executive vice president and general counsel of Constellation Energy Group Inc., and of Baltimore Gas & Electric Co.

Terra Industries makes nitrogen products and is based in Sioux City, Iowa.

Deerfield, Ill.-based CF Industries Holdings is the holding company for CF Industries, Inc., a producer and distributor of nitrogen and phosphate fertilizer products.

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