Terra Industries turns down CF Industries' latest offer

By Lisa Kerner

Charlotte, N.C., March 24 - The board of directors of Terra Industries Inc. unanimously rejected CF Industries Holdings, Inc.'s offer to buy the company.

In a letter sent to CF Industries on Tuesday, Terra said the most recent version of CF Industries' proposal "continues to run counter to Terra's strategic objectives" and "substantially undervalues Terra."

In a Monday letter to Terra, CF Industries said it is prepared to enter into a negotiated merger agreement with Terra with an exchange ratio based on $30.50 for each Terra share. The exchange ratio would not be less than 0.4129 of a CF Industries share and not more than 0.4539 of a CF Industries share.

Terra previously rejected CF Industries' offer of a fixed exchange ratio of 0.4235 of a CF Industries share for each Terra share. The Sioux City, Iowa, nitrogen products company also rejected CF Industries' unsolicited offer in January.

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

As previously reported, CF Industries' board of directors recommended that its shareholders reject Agrium Inc.'s exchange offer to acquire CF Industries in favor of a deal with Terra.

Agrium, a Calgary, Alta., fertilizer company, began an offer on March 16 to acquire CF Industries for a per-share price of one common share of Agrium common stock plus $31.70 in cash, 1.7866 Agrium shares or $72.00 in cash.

CF Industries called the cash-and-stock deal "disadvantageous" and said the offer is counter to CF Industries' long-term strategy.

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