CF Industries Holdings Inc. said Aug. 31 that it has commenced litigation in Maryland to compel Terra Industries Inc. to hold its annual meeting promptly. However, soon after CF’s announcement, Terra said it has set Thursday, Nov. 19 as the date for the shareholder meeting. Terra set a record date of Oct. 9, 2009, for the meeting and commenced the required broker notifications in accordance with the Securities and Exchange Commission’s proxy rules.
CF also announced that its exchange offer for all of the outstanding shares of Terra has expired and is not being extended.
“We believe that Terra is legally required to hold its annual meeting promptly. Under Maryland law, annual meetings must be held on an annual basis, and Terra’s last annual meeting was nearly 16 months ago,” said Stephen Wilson, CF chairman, president, and CEO. “We look forward to Terra stockholders having the opportunity to show their support for our proposed business combination by voting for CF Industries’ nominees at Terra’s annual meeting. Our proposal provides an exchange ratio premium of more than 35 percent, as well as real and substantial synergies.”
Wilson continued, “Terra’s annual meeting has always been the key event for CF Industries to advance its proposal for a business combination, and we are confident Terra stockholders will show their support. Given that the Terra board has rejected our proposal and the exchange offer could not be consummated without Terra board approval, we do not see any purpose in continuing to extend the exchange offer.”
Three Terra board positions are expiring and CF has its own slate of candidates for those positions (GM Feb. 9, p. 1). At the time that CF submitted its nominees, Terra’s bylaws required that Terra hold its annual meeting each year between April 15-May 15. In 2008, Terra held its meeting on May 6; for at least five years before that, Terra held its meetings in either April or May. When this time period arrived in 2009, Terra amended its bylaws to eliminate the requirement that the corporation hold a meeting of stockholders between April 15-May 15 (GM April 20, p. 1).
CF Composite, the unit that filed the suit, owns some 1,000 shares of Terra stock. CF filed its suit in the Circuit Court of Baltimore City. Terra is incorporated in Maryland.
Some observers questioned whether Terra really would hold its meeting Nov. 19. Terra has yet to name the location of the meeting. “At least there is a date on the calendar now. Let’s see if they stick to it,” said one CF supporter.
In the meantime, an Agrium Inc. spokesman said his company was still interested in CF, “as much as ever.” He said Agrium is currently working on getting clearance in the U.S. and Canada on the competition front. CF says that while regulators have given approval to a CF-Terra deal, they might find issues with an Agrium-CF transaction.
Agrium extended the expiration date (GM Aug. 24, p. 1) of its offer to acquire CF for $40 cash plus one Agrium share per CF share until 12:00 p.m. midnight, New York City time, Sept. 22, 2009.