CF Industries Holdings Inc. said April 24 that it has extended the expiration date of its exchange offer for all of the outstanding shares of Terra Industries Inc. common stock to Friday, June 12, 2009.
CF says this is shortly after the date by which Terra is required to hold its 2009 annual meeting of stockholders based on the record date of March 9, 2009, previously set by Terra. However, Terra’s board of directors has changed the company by-laws so that it can set the annual meeting whenever it wants (GM April 20, p. 1). To date, Terra has not set the date for its shareholder meeting, nor has it indicated the timeframe for such a meeting. CF hopes to elect three of its own supporters to the Terra board whenever the meeting is held.
The CF offer, which was scheduled to expire at 5:00 p.m., New York City time, on Friday, May 15, 2009, has been extended until 5:00 p.m., New York City time, Friday, June 12, 2009, unless further extended. All other terms and conditions of the exchange offer remain unchanged.
CF said as of the close of business on April 23, 2009, a total of 19,370 shares of Terra common stock had been tendered into the exchange offer. As of March 31, 2009, there were approximately 100 million Terra shares outstanding.
Apparently not all shareholders are happy with CF’s dealings with Agrium Inc. and Terra, according to CF’s April 30 10-Q filing with the Securities and Exchange Commission. CF said that in February and March 2009, three purported CF shareholders filed putative class action lawsuits against it and members of the board of directors alleging, among other things, that the board members breached their fiduciary duties by their actions in connection with the proposed acquisition by Agrium Inc. of CF. Two of these actions – one captioned Plumbers & Steamfitters Local 373 Pension Fund v. CF Industries Holdings, Inc., which was filed on Feb. 26, 2009, and the other, captioned Operating Engineers Local 825 Pension Fund v. CF Industries Holdings, Inc., which was filed March 12, 2009 – were initiated in the Delaware Court of Chancery. On March 17, 2009, the court consolidated these lawsuits into a single action captioned In re CF Industries Shareholder Litigation. The consolidated Delaware action remains pending, and the parties presently are engaged in the discovery process.
A third action, captioned Gallagher v. CF Industries Holdings, Inc., was filed in the Circuit Court of Lake County, Ill., Feb. 27, 2009. CF moved to dismiss the Illinois complaint on the basis that the Delaware consolidated action concerns identical issues. This motion to dismiss is pending.
Each of the suits seeks, among other things, to enjoin the company’s proposed business combination with Terra unless and until it considers other strategic alternatives to maximize the company’s value. CF said it and the board believe these suits are without merit and intend to vigorously defend their positions. Currently it said it cannot determine if the ultimate outcome of these lawsuits will have a material impact on the company’s financial position, results of operations, or cash flow.