CF Industries Holdings Inc. (NYSE: CF) on Friday said all three of its director nominees were elected to the board of Terra Industries Inc. (NYSE: TRA), significantly advancing its hostile takeover bid for the rival fertilizer company.
Terra, which has been fighting off a buyout attempt by CF had been urging shareholders to vote for its incumbent slate of directors to oppose the deal.
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It's the latest development in the fertilizer wars, and CF's victory could help bring closure to the nearly yearlong saga.
It all began when CF, which is based in Deerfield, made its first $3.6 billion bid for Terra in January. The next month, Canada's Agrium Inc. (NYSE: AGU) offered to buy CF in an effort to block its rival's grab for Terra. Agrium's offer is conditioned on CF stopping its pursuit of Terra.
Terra rejected CF's latest unsolicited takeover offer on Nov. 4. CF had offered $32 in cash -- including the $7.50 per share special dividend declared by Terra -- and 0.1034 of a CF common share for each Terra share. The deal is valued at about $4.1 billion, but Terra has consistently rejected CF's offers as inadequate.
Just Thursday, Agrium said that shareholders controlling 62 percent of CF Industries stock have backed its $5.1 billion buyout offer, which CF Industries' management is vehemently against.
CF's election win could jeopardize Agrium's deal, which offers $45 in cash and one Agrium common share per CF share is valued at about $5 billion, based on Thursday's closing price.
The fertilizer industry's hunger for consolidation intensified at the start of the year when company share prices had been beaten down. As the economy declined, struggling farmers scaled back demand for fertilizer, driving down prices and stock values for fertilizer companies.
Share prices have since recovered with an improving outlook for the industry, but still remain far below last year's levels.
On Friday, shares of CF dropped 14 cents to $82.73 at Friday’s close. Terra shares rose $1.96, or 5.1 percent, to $40.06, after earlier hitting a 52-week high of $40.37. Agrium shares rose 13 cents at $57.32.
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