(Adds CF statement)
Terra Industries Inc. (TRA) said no to CF Industries Holdings
Inc.'s (CF) latest merger agreement submitted earlier this week,
saying the bid - first disclosed two months ago - still sharply
undervalues the fertilizer maker.
"Over the last nine months, our board has reviewed five
proposals from CF - and each time the board has unanimously
determined that a combination of our companies lacks compelling
industrial logic and runs counter to Terra's strategic objectives,"
Terra President and Chief Executive Michael Bennett said
Thursday.
Monday's merger-deal submittal by CF came the same day it
announced it had bought a 7% stake the past two weeks in the fellow
fertilizer maker. The company's latest offer, - 0.465 CF share for
each Terra share - values Terra at about $3.9 billion.
The tussle is part of a three-way battle for power in the
fertilizer industry. Since the start of the year, Terra has
repeatedly refused offers from CF, which is the subject of a
similar-sized takeover attempt by Agrium Inc. (AGU). The industry
has been under strong pressure to consolidate after prices plunged
from last year's highs.
Terra Chairman Henry Slack said Thursday that Agrium's bid for
CF makes it difficult to value CF's stock, "which we believe is
inflated" because of Agrium's takeover effort. He added that Terra
believes CF holders would preferred to be taken over than acquire
Terra if given the choice.
CF, in a statement issued soon after Terra's, expressed
confidence that "Terra stockholders will show their support by
voting for" CF's nominees at Terra's upcoming annual meeting in
November. CF is backing three candidates for Terra's 8-person
board.
CF shares closed Wednesday at $86.23 while Terra finished at
$34.67. Neither were active premarket.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com