CF to open Terra bid by month's end; NRG asks investors for help; state OKs may delay Embarq takeover

By Cristal Cody

Tupelo, Miss., Feb. 18 - CF Industries Holdings Inc. on Wednesday said the company filed applications with the Department of Justice and the Federal Trade Commission for clearance of its hostile takeover of Terra Industries Inc.

CF Industries spokesman Charles Nekvasil told Prospect News that the company expects to start the tender offer any day now.

NRG Energy, Inc. asked shareholders on Wednesday to retract any shares tendered in the offer by Exelon Corp. to force a higher bid.

State regulatory approvals may hold up CenturyTel, Inc.'s $5.8 billion stock acquisition of Embarq Corp., an analyst said Wednesday.

Meanwhile on Wall Street, the indexes were mixed.

The Dow Jones Industrial Average gained 3.03 points, or 0.04%, to close at 7,555.63.

The S&P 500 index shed three-quarters of a point, or 0.10%, to finish at 788.42, and the Nasdaq Composite index fell by 2.69 points, or 0.18%, to 1,467.97.

CF pushes ahead in Terra bid

Terra in January rejected the $2.1 billion all-stock offer from CF Industries.

CF Industries has offered 0.4235 of a share of CF Industries for each share of Terra.

"We are committed to a combination of CF Industries and Terra and are confident that the transaction will be approved in all relevant jurisdictions," Stephen Wilson, chairman, president and chief executive officer of CF Industries, said in a statement on Wednesday.

Terra shares added 50 cents, or 2.20%, to close at $23.26 on Wednesday. Shares have traded from $11.21 to $57.64 over the past year.

The offer represents a 22.8% premium over Terra's closing stock price of $16.29 before CF Industries made the announcement on Jan. 15.

Analysts say the deal faces regulatory scrutiny.

Terra 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.

NRG asks shareholders to force Exelon move

NRG Energy said Wednesday in a letter to shareholders that Exelon's takeover offer of 0.485 of a share of Exelon common stock for each share of NRG is inadequate.

Stockholders of NRG had tendered about 46% of shares in January. The offer was extended to Feb. 25.

NRG said it has held discussions in vain with Exelon CEO John Rowe.

The company urged shareholders to retract any shares tendered to prompt Exelon to raise the bid.

"Rowe made it clear that Exelon would not make any meaningful increase in the price being offered to NRG stockholders, even if allowed to conduct due diligence," NRG said in the letter. "Please be assured that we would support a deal with Exelon at a fair price but, at this point, we have no reason to believe they are willing to offer a fair price."

Angie Storozynski, an analyst with Macquarie Research Equities, said Wednesday in an interview that NRG's opposition "doesn't seem to be working."

David Crane, NRG's CEO, is following the company's "prior approach to this deal and he seems to be stubborn about it," she said.

Shares of NRG, a Princeton, N.J.-based power generation company, lost 20 cents, or 1.01%, to close at $19.68 on Wednesday.

Shares of Exelon, a Chicago-based electric company, closed down $1.31, or 2.60%, to $49.11 in trading.

Embarq, CenturyTel deal hinges on states

Embarq has filed for approval of the CenturyTel buyout in California, Florida, Georgia, Illinois, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, Ohio, Pennsylvania, Virginia and Washington.

So far, approvals have been received in Florida, Georgia and Mississippi, a market analyst said Wednesday.

"However, we believe that comments submitted to the FCC by competitors/customers made a compelling case for conditions to be imposed," the analyst said in a research note. "Embarq and CenturyTel argue that the merger should be approved without conditions and have warned in the prospectus that if conditions are not acceptable, the merger could be abandoned."

Company representatives were not immediately available for comment.

The analyst said the "biggest risks to the merger are that all regulatory approvals will not be received prior to the extended end date of October 29, 2009 or that the conditions imposed by the FCC or state public utility commissions will be unacceptable."

Monroe, La.-based telecommunications company CenturyTel has offered 1.37 shares for each common share of Overland Park, Kan.-based Embarq, which provides telecommunications and logistics services.

Embarq shares rose 51 cents, or 1.54%, to close at $33.56 on Wednesday.

CenturyTel's stock gained 14 cents, or 0.56%, to close at $25.27.

Mentioned in this article:

CenturyTel, Inc. NYSE: CTL

CF Industries Holdings Inc. NYSE: CF

Embarq Corp. NYSE: EQ

Exelon Corp. NYSE: EXC

NRG Energy, Inc. NYSE: NRG

Terra Industries Inc. NYSE: TRA

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