Terra Says ‘No’ To CF Offer

Terra Industries Inc. said Nov. 4 that its board of directors, with the advice of its financial and legal advisors, has carefully reviewed CF Industries Holdings Inc.’s latest proposal to acquire Terra for the equivalent of $24.50 in cash (which equals the net value of CF’s announced offer of $32.00 that will be reduced by Terra’s previously declared $7.50 per share special cash dividend) and 0.1034 of a share of CF common stock, and unanimously rejected it as inadequate, opportunistic, and not in the best interests of Terra and its shareholders.

In rejecting CF’s latest proposal, the Board considered a number of factors, including the following:

  • CF’s proposal significantly undervalues Terra’s near-term and long-term prospects.
  • Terra’s excellent near-term outlook, particularly the strong fundamentals for nitrogen demand in the U.S. agricultural business in the coming growing season and moderate natural gas costs.
  • Terra’s projected operating improvements in 2010, specifically revenue growth of more than 25 percent over 2009 and robust operating margins.
  • Terra’s expansion of the UAN capacity at its Woodward facility, recognizing that UAN has been among the fastest growing nitrogen products in the United States.
  • Significant upside in Terra’s Environmental Technologies business, which Terra expects to generate $400‐500 million in revenues by 2015.
  • Terra’s ability to continue to make strategic and opportunistic acquisitions that build shareholder value, such as Terra’s pending acquisition of a 50 percent interest in Agrium Inc.’s Carseland nitrogen manufacturing facility and its acquisition of Mississippi Chemical Corp.
  • Terra’s track record of delivering value to its shareholders in the form of stock buybacks and dividends, which have amounted to over $1.0 billion over the last four years, including the $750 million to be paid to all Terra shareholders in December as a $7.50 per share special dividend.

“CF’s latest proposal fails to appropriately value Terra’s world class assets, strategic advantages, and prospects,” says Terra President and CEO Michael Bennett. “Terra is a preeminent pure play nitrogen company, and through the continued execution of our strategy is well positioned to take advantage of an upsurge in demand from our agricultural and industrial customer base as the economic recovery continues.”

(Source: Terra Industries’ Web site)

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