CF Industries Holdings, Inc. (CF) said Nov. 20 that all three of its director nominees were elected to Terra Industries Inc.’s board of directors. Based on a preliminary count by CF’s proxy solicitor, its nominees – John Lilly, David Wilson, and Irving Yoskowitz – were all elected to Terra’s eight-member board of directors by a substantial margin.
“We are pleased that Terra stockholders have voiced their support for CF Industries’ proposed acquisition of Terra by voting for all three of our director nominees,” said CF Chairman, President, and CEO Stephen Wilson. “It is time to move forward and put these two great companies together.”
Terra confirmed that based on preliminary estimates, it appeared that CF’s nominees were elected. Terra issued the following statement:
“While we are disappointed with the outcome of today’s vote, we appreciate the consideration and input from our shareholders.
“During the weeks leading up to the annual meeting, Terra shareholders delivered a consistent message to Terra’s board and management team that CF’s latest proposal substantially undervalues Terra’s robust near- and long-term prospects and that they do not support CF’s proposal on its current terms. Nevertheless, Terra shareholders noted that current trends in the fertilizer market could provide potential consolidation opportunities for many market participants. Terra’s board, as always, will continue to maintain an open-minded approach to considering any bona fide opportunity to create meaningful value for Terra shareholders.
“Terra’s product mix and geographic advantages position us to benefit significantly from an expected upsurge in demand from our agricultural and industrial customer base as the economic recovery continues. In fact, since the beginning of 2009, Terra’s share price has appreciated approximately 130 percent. Terra’s board has a consistent track record of delivering shareholder value, including through the recently declared $750 million special cash dividend that will be paid to all Terra shareholders in December.
“The final results of the election will be announced in the next two weeks following tabulation and certification by IVS Associates, Inc., the independent Inspector of Elections.”
With the three CF nominees now on Terra’s eight member board, CF’s case will definitely be heard. However, whether the other five members can be swayed is still to be seen.
In other merger news last week, Agrium Inc. said Nov. 19 that CF stockholders have tendered approximately 30 million shares, or 62 percent of the total outstanding CF shares, into its offer of $45.00 in cash and one Agrium common share per CF share, as of its expiration at 12:00 midnight, New York City time, Nov. 18. Agrium says the offer is now valued at $101.90 per CF share, or a total consideration of $5.1 billion, based on the Nov. 18 closing of Agrium’s shares.
Agrium urges the CF board to respect a clear stockholder mandate and sign a merger agreement with Agrium. A majority was also tendered last summer, but did not prompt CF’s board to act. The board is not bound by the tender results, and shareholders can withdraw their tenders.
While CF had earlier indicated that a $100 per share offer might get it to the table, one observer this week told Green Markets that that was months ago, and that the $101.90 share value now is simply based on the higher price of Agrium stock.
In the meantime, Agrium has extended its offer until 12:00 midnight, New York City time, Dec. 18, 2009.
Agrium says it also has a clear path to completion of the deal as it has satisfied all regulatory issues in Canada and has signed a proposed consent agreement with the U.S. Federal Trade Commission.
CF issued a statement Nov. 19 regarding Agrium Inc.’s tender offer for all of the outstanding shares of CF: “CF Industries does not believe that the tender results reflect stockholder support for the terms of Agrium’s offer. In fact, CF Industries has heard from its stockholders that there is very little support for the terms of Agrium’s offer. The tender result does not change the fact that Agrium’s offer is far from compelling.”