A three-way takeover battle in the fertilizer industry got more
complicated Tuesday as CF Industries Inc. (CF) sent a letter to
Terra Industries Inc. (TRA), questioning the company's purchase of
100 shares in CF stock and asking why it isn't interested in
negotiating a merger agreement.
The jockeying for position, which also includes rival Agrium
Inc. (AGU), comes as fertilizer producers look to take advantage of
the drop in sector stock prices since last summer to buy up
production capacity ahead of an expected rebound in prices.
Last month, Terra rejected CF's sweetened $3.07 billion takeover
offer, saying it substantially undervalued the company. Meanwhile,
CF has recommended its shareholders reject an increased hostile bid
from Agrium, even though it represents a 35% premium to CF's
closing price the day before the offer was made.
In Tuesday's letter, CF questioned why Terra hasn't announced
the time and place of its annual meeting, which is required to be
held no later than May 15, and said it continues to believe in the
"compelling strategic logic" of a combination between the
companies.
CF has also nominated three director candidates to Terra's
board.
CF's shares were at $73.40, down 0.3%, in after-hours trading,
while Terra's and Agrium's were unchanged. Terra's shares closed
Tuesday at $28.85, up 1.6%, and Agrium's closed at $40.62, up
2.8%.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com