* Terra rejects latest CF offer
* Says offer was at the same price of Nov.1 bid
(Adds quote from Terra CEO, new details from source,
By Michael Erman
NEW YORK, Nov 22 Fertilizer maker Terra
Industries Inc TRA.N on Sunday rejected rival CF Industries
Holdings Inc's (CF.N) latest proposal to buy it, saying the new
offer was at the same price as CF's already-rejected proposal
from Nov. 1.
Terra, whose shareholders elected a slate of three
directors backed by CF Industries on Friday, said the CF bid
had proposed a deal at the same price as before that also
included a 30-day "go shop" provision subject to a break up fee
and expense reimbursement.
"Nothing about the vote changed the value of CF's
proposal," Terra Chief Executive Mike Bennett said in a
statement. "We continue to believe that Terra's current
strategy, which capitalizes on our attractive product mix,
diversified customer base and geographic advantages, will
deliver greater value than CF's proposal."
But a source close to CF said the company had sent the
offer over as a possible framework for a deal. The source said
CF was prepared to discuss the terms of its offer once it
understands what the process is to reach a deal.
CF has offered to pay $24.50 in cash and 0.1034 shares of
its stock for every Terra share. The offer also includes a
$7.50 per share special cash dividend, which Terra shareholders
will receive whether the deal is accepted or not.
Terra's board, which previously rejected CF's proposal as
inadequate, again concluded the proposed merger agreement did
not provide any basis for engagement with CF, it said.
The companies had discussed a breakup fee of around $1.50 a
share, or roughly $150 million, the source said.
CF has been pursuing Terra since January and has been the
target of its own hostile takeover bid from Canada's Agrium Inc
The nearly year-long, three-way takeover battle between
Agrium, CF and Terra has put the spotlight on the three
companies and the increasingly hot fertilizer sector.
The industry has been rife with both proposed and rumored
mergers, as many believe the world's growing demand for food
and biofuel will lead to sustained growth and soaring profits.
On Friday, Terra's shareholders voted in the CF slate with
the dissident directors taking roughly 45 percent of the shares
outstanding in the preliminary vote count and Terra's slate
with around 35 percent, according to a source familiar with the
matter. That includes around 7 percent of Terra's shares that
The company's shares rose more than 5 percent to over $40 a
share, reaching their highest point in more than a year after
Terra said on Sunday that it will seat the new directors
when the election results are certified. But the company said
it has also taken steps to increase the size of its board and
will reseat the three directors that shareholders voted out.
That slate of directors include the company's chairman,
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(Additional reporting by Paritosh Bansal; Editing Bernard
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