CF Industries will up bid for Terra Industries despite Agrium offer

By Lisa Kerner

Charlotte, N.C., Aug. 5 - CF Industries Holdings, Inc. said it is ready to increase its offer for Terra Industries Inc. to a fixed exchange ratio of 0.465 shares of CF Industries for each Terra common share.

The proposed offer is a 35% premium over the exchange ratio on Jan. 15, 2009, just prior to when the initial offer of 0.4235 CF Industries shares for each Terra share was made, according to CF Industries.

In a news release, Terra said its board of directors will consider CF Industries' latest proposal at a meeting to be held by the end of the month.

In March, CF Industries offered an exchange ratio based on $30.50 for each Terra share. The exchange ratio would have been 0.4129 to 0.4539 CF Industries shares for each Terra share.

Terra, a Sioux City, Iowa, nitrogen products company, rejected that unsolicited offer as well as CF Industries' prior offer in January.

CF Industries extended its exchange offer for Terra shares to 5 p.m. ET on Aug. 21 from Aug. 7.

A total of 9,144,017 shares of Terra common stock had been tendered into the exchange offer as of the close of business on Tuesday.

CF Industries' board of directors is also ready to return at least $1 billion of cash to stockholders of the combined company following the closing of the transaction via open-market purchases or a self-tender offer, the company said.

Also, a total of 5 million contingent future shares would be distributed to CF Industries stockholders prior to the merger's close. The contingent shares would be converted into CF Industries common stock if the stock trades at more than $115.00 per share during a specified time period.

Agrium wants CF Industries

Agrium Inc. said on Wednesday it remains committed to its acquisition of CF Industries and is prepared to increase its offer for the company.

Currently, in exchange for each CF Industries share, shareholders will receive $40 in cash plus one Agrium share.

As previously reported, Agrium extended its tender offer for CF Industries to midnight ET on Aug. 19 from July 22.

On March 16, Agrium, a Calgary, Alta., fertilizer company, began the unsolicited exchange offer after CF Industries rejected Agrium's offer to acquire the company in favor of pursuing a deal with Terra.

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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