Terra Rejects CF Industries Takeover Bid
Proposed deal undervalued the company.
Bryce Knorr
Published: Jan 28, 2009
Terra Industries today rejected CF Industries takeover attempt, saying the proposed deal undervalued the company. CF Industries announced the unsolicited $2.1 billion offer for Terra on Jan. 15, in a combination that would create the world's largest nitrogen producer.
"We concluded that your proposal does not present a compelling case to create additional value for the shareholders of either company, and that it substantially undervalues Terra on an absolute
basis and relative to your company," the Terra board said in a letter sent to CF today.
In addition, Terra said it was "perplexed by your decision to make a public approach that is conditioned on and subject to due diligence•"
The proposed takeover comes as the fertilizer industry is roiled by low prices, with the value of some nutrients falling by 90% in the wake of record prices and the global economic crisis. While both prices and demand have begun to pick up seasonally in recent days, production at many plants remains closed as companies try to balance big inventories with sluggish demand.
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